Monday, February 9, 2009

It's the burn rate, stupid

Some further evidence this weekend that the Conservative burn rate will become every bit as big a story as their fundraising prowess.

First, Impolitical asks a key question:
Could they be pushing a million in legal fees over the past year for all of this litigation? It's possible that they are indeed in that ballpark. All this litigation is a pretty expensive undertaking.
And today Bev Vongdouangchanh raises the cost structure of this type of fundrasing:
"One of the more fascinating things about that, it seems to me, is they've adopted the American model of the permanent campaign so that whereas historically, Canadian 
parties would go dormant between elections, now you have an understanding at least on the part of the Conservatives that you can't afford to do that," said University of Windsor political science professor Heather MacIvor, an expert in political financing and longtime observer of the Conservative Party. "You have to be constantly preparing for the next election and that means constantly raising money, particularly since you are restricted by law now. You can't just tap the chartered banks for $10-million and call it a day, you've got to keep going back to people again and again. It's very labour intensive." 
Prof. MacIvor said the Conservatives are good at turning what would be political disasters for the party into fundraising fortunes. 
The pitfall for the Conservatives is that as the economy worsens their ability to spin incompetence and failure into fundraising gold may suffer.  If the party has commtments to ongoing expenditures this can quickly reverse their fortunes.

This is not meant to excuse the Liberals for their incompetent fundraising effort.  It is meant to illustrate that expenditures tend to bulge out to income.  There is a cost structure to this.  If there are any withdrawals of funding, the ongoing commitments will be a huge drain on there bank account.
Recommend this Post


Anonymous said...

What costs the Canadian taxpayer more, the $1.95 per vote or the huge tax rebates for donating to the individual parties? With the huge amounts of donations the Conservatives receive I am wondering if this actually costs the taxpayers more.

Constant Vigilance said...

Using the always fallible quick math method, we can see from the Hill-Times article that the Conservatives raised $21 million and the Liberals raised $15 million in 2008. We will leave the other parties out for reasons that will soon become evident.

If we assume that each donor claims the $0.75 tax rebate, that means that the government shelled out over $27 million in refunds.

In the 40th General Election, there were 13,834,294 ballots cast. At $1.95/ballot, the total payout is $26,976,873.30. If the Bloc, Green and NDP are added, the cost would be higher than the tax funding amount. This is why I said during the coalition kerfuffle that if the Conservatives goal is to save money they should scrap the tax refund, not the vote subsidy.