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How Canadian Political Parties Spent Money

Free Analysis Essay on Canadian Politics and their Campaign on May 2011

Abstract

Social, economic and political systems are increasingly getting intertwined as changes in one system affect others. One of the systems that have attracted much interest and concern is the political system due to the interest in elected leaders and their ideologies. Political system greatly affects the economic stability of any nation. This paper looks at the Canadian case and particularly at the amount of money the candidates for the Conservative, the Liberal and NDP parties spent on their constituency campaigns for the 41st General Election in May of 2011.

Keywords: money, political parties

How Canadian Political Parties which took Part in the May 2011 Election Spent Money during their Campaigns

Instructions

The number of candidates for the Conservative, Liberal and NDP parties was 307, 306 and 308 respectively in the General Election of May 2011, averaging to 307 candidates per party (Elections Canada, 2014). Therefore, to understand the amount of expenditure of the candidates of these three political parties, this essay examines the attributes of financing of the campaigns, electoral campaign expenses and the impact of the chosen sums on the results.

Financing the Campaigns

Contributions, loans and transfers were the main financial sources for the constituency campaigns of the 41st election in Canada. Contributions represented both monetary and non-monetary donations towards financing of political campaigns (The Government of Canada, 2015). There were 47,257 contributors for the three parties. The Conservative, Liberal and NDP Parties candidates had 18,159, 12,080 and 17,018 contributors respectively. This implies that out of the total contributors, the Conservative party had the most contributors at 38% followed by the NDP at 36%, while the Liberal parties had the least of 26%. The total amount of contributions was 10,274,757 dollars shared at 50%, 27% and 23% among the Conservative, Liberal and NDP Parties candidates respectively. Therefore, the Conservative party, with the most contributors, achieved the most contributions of 5,119,956 dollars, the Liberal achieved a larger amount of 2,795,445 dollars with the smallest number of contributors, while NDP realized the least contributions of 2,359,356 dollars.

Therefore, the total average number of contributors per candidate for the three parties was 154, spread at 59, 39 and 55 among the Conservative, Liberal and the NDP parties respectively. As a result, the total average amount per contributor for the three parties was 652 dollars. Every contributor of the Conservative party gave an average of 282 dollars, the Liberal party received an average of 231 dollars from each contributor, and NDP received average contributions of 139 dollars. On the other hand, the total average amount of contributions per candidate for the three parties was 33,473 dollars. The Conservative party received an average of 16,677 dollars per candidate in contributions to be spent on the constituency campaigns for the 41st General Election in May of 2011. Similarly, the Liberal party received an average of 9,135 dollars per candidate, while the NDP gained 7,660 dollars. Thus, the Conservative party was the most supported both by contributors and contribution, while the NDP had more contributors with the least amount per each one. The Liberal party averaged in between the NDP and the Conservative (Elections Canada, 2014).

The loans subject to repayment with interest was another source of electoral campaign financing (The Government of Canada, 2015). The three parties received a total sum of 2,462,536 dollars in loans to finance the 41st General Elections campaigns. The Conservative party received 961,727 dollars, constituting 39% of the total loan. The Liberal party received the biggest loan of 1,386,064 dollars, or 56% of the total number. Lastly, the NDP had the least financing through the loan at 114,746 dollars constituting 5% of the total loan. Consequently, the average amount of debt financing per party was 3,133 dollars for the Conservative party, 4,530 dollars for the Liberal party, and 373 dollars for the NDP. The average debt financing of the campaign among the three parties was at 2,678 dollars per party and 8,035 dollars in total loan average. As a result, the Conservative party had the highest debt with interest, while the NDP had the least debt with interest (Elections Canada, 2014). Therefore, bigger debt portfolio of a political party during the electoral campaigns implies higher burden of interest payment. While generous financing guarantees electoral success, those with low debt portfolio remain averse of the political risk and are less likely to succeed.

Finally, transfers also financed the campaigns. A transfer is a provision of funds, property or services between political entities of the same affiliation (The Government of Canada, 2015). On average, the transfers per candidate were at 49,528 dollars for the Conservative, 37,682 dollars for the Liberal party, and 18,328 dollars for the NDP. Thus, the Conservative party had the largest number of transfers at its disposal, while the NDP had the smallest share. The total transfers for the three parties amounted to 32,380,871 dollars, which was contributed to by the Conservative’s 15,205,010 dollars, the Liberal’s 11,530,691 dollars and the NDP’s 5,645,170 dollars (Elections Canada, 2014). Again, the ability to consolidate the party’s resources in transfers for its candidates in the electoral campaigns is a sign that the party is more determined to make viable investments in its candidates and is more likely to win the elections.

Electoral Campaign Expenses

Electoral campaign expense is the expenditure rationally spent as an election’s incidence and can be categorized into election expenses, candidate’s personal expenses as well as other electoral campaign expenses (The Government of Canada, 2015). The total funds that were used to directly promote or oppose the party during the general election period constitute the electoral expense. The electoral expense is subject to a limit set by Elections Canada by considering the list of electors, the number of electors in a district and the national average, the geographical coverage of an electoral district and the national inflation adjustment factor (The Government of Canada, 2015). Therefore, in the 41st General Election campaign, the Conservative party candidates used a total of 19,600,286 dollars against the limit of 28,060,255 dollars. This averaged to 63,845 spent per candidate against the allowed limit of 91,401. The Liberal party candidates used a total of 14,698,954 dollars against a set total limit of 27,661,913 dollars. The average electoral expense per candidate for the Liberal party was thus 48,036 dollars against the set average limit of 90,398 dollars. Equally, the NDP utilized 7,212,787 dollars in electoral expenses against the total limit of 27,433,721. On average, the electoral expense per candidate for the NDP was 23,418 dollars against the set limit of 89,071 dollars per candidate (Elections Canada, 2014). Therefore, none of the three political parties spent more than the set limit.

Although, another electoral campaign expense was the candidates’ personal expenditure. The total candidates’ personal expenses added up to 810,559 dollars for the Conservative party, averaging to 2,640 dollars per candidate. The total candidates’ personal expenses for the Liberal party added up to 362,779 dollars, averaging to 1,186 dollars per candidate, while those of the NDP were 224,050 dollars averaging to 727 dollars per candidate (Elections Canada, 2014).

The Impact of Campaign Budget on the Electoral Result

Based on the abovementioned data, the campaign budget is constituted both by sources of financing and expenses. Consequently, those political parties that can run lean budgets within the stipulated limits stand higher chances of electoral victory. For this to happen, the candidates must more than match their expenses with the inflows of resources. A general acceptance of the political party would manifest itself in a wide-scale endorsement by those who ascribe to the ideology of the party. Such endorsement would lead to a higher number of contributors providing more funding. The parties who are least endorsed would receive less contributions and most likely would not perform well during elections.

Equally, those political parties which are guaranteed electoral victories if they meet a given financing threshold would seek external credit to finance such deficits. Therefore, the parties with higher loan portfolios are risk takers assuming that such credit financing will yield electoral victories. Otherwise, it would be futile to finance a failing project by credit. Political parties with low debts and equally low contributions are either sure of the support of the electorate or are in the race for a try. The amounts of transfers can also provide a clear indication of the parties’ commitment to winning the elections. Large transfers signify a strong will to use the party’s resources to gain an electoral seat.

What is more, the political parties that are able to keep their expenses at the margin of the set limits are more likely to win elections as opposed to those whose activities can only allow marginal expenditure. The reason is the fact that the latter cannot guarantee electoral success. As a result, political parties capable of keeping the expenditures of the candidates as well as possible while also working within the limits are safer.

However, for a comprehensive data that can deliver accurate results and predict whether financing influences electoral victory or not, Elections Canada needs to consider the following adjustments in the presentation of their data:

  • First, the impact of interest incurred on loans obtained by the parties should be part of the cost of running a campaign, and should therefore be captured at the agreed rates of interests;
  • Secondly, there should be a set limit on the expenses incurred by the political parties’ candidates;
  • Third, the variance between the available resources and the variance after expenditure should be explicitly reported as an election monitoring performance indicator.

Conclusion

In conclusion, it is clear that there was an average of 307 candidates per party for the Conservative, Liberal and NDP parties in the General elections of May, 2011. The review of the electoral campaign financing, expenses and the impact on the electoral results would help understand the parties’ spending dynamics. In terms of contributions, the Conservative party had the highest average number of contributors, 59, contributing an average of 16,677 per candidate. The Liberal party had the smallest number of contributors, 39, contributing a higher amount of 9,135 dollars on average, while the NDP had the highest number of contributors, 55, contributing the average 7,660 dollars per candidate. Loan averages per candidate were 3,133, 4,530, and 373 dollars for the Conservative, the Liberal and the NDP parties respectively. The average transfers per candidate were 49,528, 37,682, and 1,832 dollars for the Conservative, the Liberal and the NDP parties respectively. Therefore, the average amounts of finances available per candidate for these parties respectively were 69,338, 51,347, and 26,361 dollars. However, the expenses for the political parties within the set limit were 66,485, 49,221 and 24,146 dollars for the Conservative, Liberal and NDP parties respectively. A difference of 2,853, 2,126, and 2,216 dollars respectively with the available finances can be calculated. All these factors are illustrated in appendices 1 and 2 (Elections Canada, 2014).

Therefore, multiple sources of funds, endorsements and debt portfolios indicate a possibility of winning given a high risk-reward relationship. Although, careful expenditure within the Canada Elections regulations indicates higher probability of electoral success. In addition, proper comprehensive costing, reporting of the budgetary variance and candidates’ personal expenditure limits remain vital for controlling campaign financing. However, it would be very difficult to calculate exact winning chances without factoring in other sociopolitical factors prevailing among the political parties.

 

Appendices: Analysis

Appendix 1
Number of candidates Political party Number of contributors Total amount of contributions Total amount of loans Total amount of transfers Total amount of election expenses subject to limit Permitted limit of election expenses Total of candidates personal expenses
307 Conservative Party of Canada 18,159 5,119,956 961,727 15,205,010 19,600,286 28,060,255 810,559
306 Liberal Party of Canada 12,080 2,795,445 1,386,064 11,530,691 14,698,954 27,661,913 362,779
308 New Democratic Party 17,018 2,359,356 114,746 5,645,170 7,212,787 27,433,721 224,050
party totals 47,257 10,274,757 2,462,536 32,380,871 41,512,028 83,155,889 1,397,388

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