Friday, August 14, 2009

Party Funding - Part Deux

A few days ago, I wrote about party funding, in response to talk of removing the public per-vote funding from the Bloc Quebecois.

One of the issues I was unsure about was where Bloc funding actually comes from. The Bloc relies on fundraising at the local riding level more than most parties. The Conservatives and some pundits have referred to the Bloc receiving 86% of its revenue directly from the per-vote taxpayer funding. I wrote about how that is inaccurate, as the Bloc raises funds in a different way than other parties.

Thanks to the terrific information compiled by The Pundits' Guide, an incredible source for anything to do with elections, party nominations, and party funding, I can provide you with some more accurate information.

This chart from TPG shows where funding comes from for all five major parties: As you can see, parties receive money from three major sources: central fundraising, riding association fundraising, and the public funding (the riding fundraising information for 2008 hasn't been compiled yet, as the info from TPG is only at a preliminary stage). One important thing to take from this chart is that the public funding hasn't replaced central or riding funding for either the Conservatives or the Bloc Quebecois. The argument that the Bloc survives off of the government funding, thus, falls flat. They've only used it to supplement their own fundraising, not replace it.

Prior to the public funding in 2004, the Bloc raised anywhere from $900,000 to $2,000,000 per year. Between 2004 and 2007, the Bloc has raised $1.7 million, $1.6 million, $1.5 million, and $1.2 million, respectively. Obviously, the amount being raised by the Bloc is slowly reducing, but this is still well within their pre-2004 performance. From this we can draw the conclusion that the Bloc is not relying on the public funding more than other parties. The argument, instead, can be made that it is the Liberals and the NDP who rely on this funding more than anyone else.

Let's look at 2007, the last year that TPG has complete information. The Bloc received 71% of its revenue, or $3.0 million, from the public funding (rather than the oft-quoted 86%). The remaining 29% came from their own fundraising initiatives, including $400,000 at the national level (or 10%) and $800,000 (or 19%) at the riding level. Now, as far as I can tell, fundraising at the riding level is far more complicated to compile, and must be reported at a different time than central funding. If I'm wrong correct me, but my understanding is that the parties need to report on their national fundraising on a quarterly basis while their riding association funding is reported on an annual basis. This leads to the mistaken view that the Bloc, which relies on central fundraising far less than the other parties, receives the vast majority of its funding from the public per-vote subsidy. The fact of the matter is that about 1/3rd of the Bloc's funding comes from private donors, and 2/3rds of that comes at the riding level. In 2007, only the Liberals (at 21% or $3.5 million) relied on riding-level fundraising more than the Bloc. The Conservatives and Greens received 15% of their funding at this level, while the NDP received 11%.

That the Bloc doesn't need to raise as much money as the other parties themselves comes as no surprise. Their expenses are much less than the other parties. They only operate in one province, so travel expenses are lower. They only communicate in one language, and they only have to try to reach 7 million people rather than 33 million. Should they be penalised for this? No, as this is a strategic choice by the party. Any of the pan-Canadian parties could choose to focus on one or two regions and so save their money. I'm sure that this is done to some extent, with parties spending a disproportionate amount of their revenue on individual regions.

Minister Steven Fletcher, who brought this issue to the forefront, wrote a letter to the Toronto Star in response to the criticism that his position was anti-democratic because it targeted the Bloc:

While some have advocated ending the per-vote subsidy only for the Bloc Québécois, that is not the position of our Conservative government. We believe that no party should have its operations supported by this taxpayer subsidy and that all parties should be primarily funded by their supporters.

This is clearly a more fair position to take, all parties should be treated equally. But the last part of his letter (We believe that no party should have its operations supported by this taxpayer subsidy and that all parties should be primarily funded by their supporters) nevertheless remains disingenuous. As I've shown in my earlier post, all parties rely primarily on taxpayer subsidies. As a reminder, anywhere from 50% to 75% of public donations are subsidised by the government - you receive 50% to 75% of your donation back on your taxes.

When you look at it in this manner, you see that, in 2007, the parties were funded by taxpayers to the following extent (rough estimates):

Conservatives - $24.6 million or 77%
Liberals - $13.8 million or 84%
New Democrats - $8.2 million or 82%
Bloc Quebecois - $3.8 million or 90%
Greens - $2.2 million or 85%

Kudos to the Conservatives for relying on taxpayer funding in the smallest proportion, but as you can see all parties rely primarily on taxpayer subsidies. In fact, about $52.6 million in taxpayer funding went to the five parties. Here are the parties' proportion of that funding, compared to the vote received in 2006:

Conservatives - 46.8% of funding, 36.3% of vote
Liberals - 26.2% of funding, 30.2% of vote
New Democrats - 15.5% of funding, 17.5% of vote
Bloc Quebecois - 7.2% of funding, 10.5% of vote
Greens - 4.2% of funding, 4.5% of vote

If the per-vote funding was the only funding parties received, it would actually be the most democratic option and would save taxpayer dollars. The conclusion that must be reached, then, is that all parties rely primarily on taxpayer dollars and that to remove the per-vote funding would actually make things less democratic and more unfair. Barring private donations, or removing the subsidy on private donations, would make things for more fair and would reduce taxpayer funding of political parties by about 50%.

The ultimate conclusion, then, is that this entire argument is based on political rhetoric rather than the facts.


  1. Eric, the graphic you presented destroys your own point.

    Look at the bloc numbers. They are flat, at least the blue part is. The subsidy is like a bonus, extra cash on the side.

    Compare this to the Liberals or even the NDP, which is flat only if you take the subsidy into account.

    I have a table I actually built, a while back, using elections canada data. I am including it in my next post as to not trigger any filters. While I am not 100% positive (as the elections canada data I built this from was confusing to say the least) these numbers look like pre-subsidy numbers.

  2. Here's that table its a graphic

  3. Eric. I've compared my table to your graph, and my numbers do match the pre-subsidy numbers shown on your graphic. Thus allowing me to make comparisons.

    The bloc is getting, in subsidy alone, more money, each year, than they ever got in a single year without the subsidy.

    Look at the NDP 2003 number and compare it to since the subsidy, now look at my table. The NDP is currently getting more money, total, than they have ever got before, year over year.

    The party most dependant on subsidies seems to be the Bloc, followed by the Liberals. The Liberals, in fact, are only maintaining traditional funding levels due to the subsidy. A quick glance at my table shows that the Tories have indeed usually been better fundraisers than the Liberals, but not by these margins (currently they are taking in double the haul where as in years like 1978 or 1981, the Tories were only able to rake in about a million more dollars. While the Liberals lead in the 90's, remember the right was divided. A unified right-party would have just about matched or beat the Liberals in 1996, 2000, 2001, and 2002

    Long story short. The Bloc is the "main story" when it comes to these subsidies, but the Liberals cannot be ignored either.

  4. I find the graph somewhat hard to read. Some white space between the different parties would clarify that it's not all one long data series, but rather five separate data series all bunched together.

  5. Nixtuff,

    I think you're missing the point of my argument. The Bloc is doing as much fundraising as it used to (I believe your table omits the riding fundraising, which I've shown is a significant part of Bloc fundraising). Only the NDP and the Liberals have done less fundraising and have allowed the subsidy to pick up the slack.

    Yes, the Bloc benefits from the public funding but so does every party. And as I've shown, every party gets a very large proportion of their funding directly and indirectly from taxpayer dollars.

    Again, if you look at the numbers in detail, the Tories receive over six times as much direct and indirect funding as the Bloc, while having less than four times as many votes. To then take on the holier-than-thou position of Minister Fletcher is misleading.

  6. And yes, it is a bonus for the Bloc but it is also a bonus for every other party. It would give the other parties an unfair advantage if the per-vote funding was removed from the Bloc alone.

    But as the government has stated that is not their position, that debate is merely speculative.

    My argument is not in defense of the Bloc, it is in defense of democratic fairness. And when it is brought up that parties shouldn't rely primarily on taxpayer-funding, it is dishonest since all parties rely primarily on taxpayer-funding.

    It does not raise the level of political debate to use this sort of misleading information.

  7. Could I just add to the discussion that no data was collected on riding fundraising prior to 2004. Some parties included it in central fundraising; some did not. The NDP's older reports also consolidated their provincial parties' finances as well.

    2003 is a bad comparison year to use, because parties undertook unusual activities in the last year before the new legislation took effect.

    Sorry the graph doesn't please everyone. I worked within the limitations of MS Excel, and the time and data I had available.

    I think it is safe to say that the subsidies replaced corporate fundraising for the Liberals and gave the NDP, Bloc and Green Party a bit of a boost. It's hard to assess the impact on the modern Conservative Party, but certainly the old PC party relied on corporate contributors a lot as well.

  8. The data I used to build my table was taken from the Elections Canada website about 2 years ago. The data is still there (I checked).

    I'd love for someone to take all that data along with the new data (and any other datapoints such as riding funds and subsidy) and build a better table/graph out of it

    Sadly at this time, this is beyond my ability (mostly timewise)


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