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Tailor: Unintended Consequences of Cutting the Per-Vote Subsidy

June 22, 2011

After the 2008 Canadian Election, wherein the Conservatives came back as a minority government, Harper purposefully tabled in his budget the removal of the per-vote subsidy for political parties. It was seen as a blatant attack on the rather weak fundraising structure of the Liberal Party, knee deep in debt, and the hope was that the budget would be supported or another election be called. This would have conferred upon Harper his coveted majority as the public would have disdained Stephane Dion, Jack Layton, and Gilles Duceppe for bringing voters to the polls yet again. As we know, this didn’t happen, and a tentative “coalition of losers” of sorts was established, which the Tories didn’t see coming. Parliament was prorogued, and Harper promised that his party wouldn’t go about with removing the subsidy unless if they had a majority. The rest was history.

Fast forward to today. The Tories have now got their majority and the removal of the per-vote subsidy is in their budget. Will it leave the Bloc near death? Will it leave the Liberals without their crutches and the NDP without their income supplement?

The answer is yes to the questions above, however, this is perhaps the medicine we as Canada need for healthier political parties and maybe even a more politically active Canada. If anything, the removal of the per-vote subsidy will hardly go just as planned for the Tories as of now, and the primary beneficiaries of this will likely be the parties that will feel the most hurt in their wallets.

I’ll be bold in my convictions and predictions, and put it bluntly as follows:

Each party will likely see a growth in their base of support and voter turnout will be greater than it was in the last election. As a result, in the next election, we will see greater political involvement amongst Canadians with the Liberals, the NDP, the Bloc, and the Greens. Alas, the Conservatives will lose support, as karmic retribution for scrapping the per-vote subsidy.

I couldn’t be more serious.

The removal of the per-vote subsidy definitely was a threat under a minority Conservative government. An election could have been called anytime, and the removal of the subsidy in 2008 would have left parties with their coffers drained as they would have to perpetually campaign while fundraising at the same time. It would have been a nightmare for the opposition to go into the 2011 election without the per-vote cash on hand, and as outlined by the Globe and Mail, it would have handed the Conservatives a supermajority akin to the Mulroney Days.

The opposition parties are lucky. Under a majority government with a 4 year mandate, the dynamics have changed. No longer does any party have to be in a permanent campaign mode, and the phasing out of the per-vote subsidy will now allow the opposition parties to renew their fundraising mechanisms and be on par with the Tory money-making machine.

So how will they go about doing this?

Well, in the private sector, when you already have an existing brand and want to garner more money from it, you either maximize revenues from your current set of customers, or expand your base of customers. To do this, you must at least market your brand at a greater frequency.

The dynamics of fundraising are similar. You need to have a brand (the party), market the brand to gain and retain supporters, and then garner donations from these supporters. At this point, marketing and fundraising are intertwined, and the latter cannot be done without the former.

Consider that you have your current base that is filled with loyal supporters that will give you a donation. You can maximize the amount of money received from this current crop if you wish to, however you will eventually reach the legal donation limit and the arbitrary limit each individual imposes upon their donation. As seen from the exit polls, the current crop simply isn’t enough for opposition parties to garner a level of donations that would be on par with the Conservatives, or their respective regional competition.

Due to this, the opposition will have to expand beyond their current base and market themselves to gain more supporters. This can be done in two ways: eat into another party’s support base, or look towards the 39% of eligible Canadians who did not vote last election. To hold success in the coming election, both will have to be done through a variety of ways; by marketing the brand and perhaps modifying the political brand. In terms of modifying the brand, the NDP may increase their base by removing the word “socialism” from their constitution, making them more inclusive and reforming in the way New Labour had done in the UK and this can whittle away at the Liberal base. Speaking of the devil, the Liberals may adopt an idea gaining traction in party circles such as the primary contest system, as it is done with the GOP and the Democrats in the United States to select presidential candidates, which would likely secure the support of some of the 39% that didn’t vote due to its novelty. Whether or not the political brands will be changed or not, which is likely the case, we will see an increase in marketing for the purposes of garnering more funds. I’m willing to believe that these efforts will be successful, as the opposition parties will have to adopt many methods employed by the Conservatives, such as micro-targeting efforts, pre-election advertising, and robo-calls, to gain fundraising parity and to be a more competitive party in the oncoming election.

So with further marketing efforts, we will see an increase in the base of support of the opposition parties, which will largely be the result of getting voters who stayed home last election to pledge their support towards one of these parties. So not only would the support for the opposition increase, but this should result in an increase in donations as well as an increase in voter turnout in the coming election.

This leaves me to my final prediction: how will the Conservatives lose support?

This would be due to the culmination of the aforementioned forces unleashed largely by the fundraising efforts of the two opposition parties best fit to govern: the Liberals and the NDP. The core marketing strategy of either party would be to argue that they are the better alternatives to the Tories that currently govern, as a means of differentiation. They will need to decrease the support the Tories have while increasing their own and voters, who are known to be fickle, will likely succumb to these efforts. Furthermore, given the course of the next four years and the newfound vigor to fundraise due to being in financial dire straits, the opposition parties’ marketing and fundraising efforts will have the added effect of serving as an attack on the Tories.

To wrap things up, as a result of the removal of the per-vote subsidy, each opposition party will probably see a growth in their base of support, garnered from one another and those who did not vote the election before through their combined marketing and fundraising efforts. Due to this, we’ll likely see an increase in voter turnout and political involvement amongst the opposition. Due to efforts in differentiation, a cornerstone of proper marketing practice, the opposition will have to attack the Conservatives in order to explain why they are the only ones that will be able to “save Canada”. Over the course of the next four years, this will all lead to a loss in support for the Tories, simply because they chose to get rid of the per-vote subsidy which would have otherwise left their political opponents largely complacent.

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9 Comments leave one →
  1. June 22, 2011 2:21 am

    Wow. If it weren’t for the fact that that made sense I’d call you crazy. I think there’s other elements that, along with what you’ve mentioned, will lead to a conservative defeat in 2015. Namely, a polarization of idealism on the left and in the centre (including the red Tories) due to any number of conservative policies. Either way, great post. I had not thought of the per-vote subsidy like that.

  2. June 22, 2011 2:21 am

    sorry for the double comment there, not sure how that happened

  3. Pickles permalink
    June 22, 2011 9:45 am

    This is putting lipstick on a pig.
    Political contributions come from disposable income. Many people who would support a left wing party don’t have much of that. The per vote subsidy gave a voice to the poor. Removing it is Harper’s way of disenfranchising them.

  4. June 22, 2011 2:19 pm

    Actually Pickles, statistics showed that the poor supported the Conservatives more than any other party in the last election. The notion that the poor support left-wingers is rather ill-founded. Areas rife with poverty also consist of crime, drug trade, and the gang violence. Voters in these areas are susceptible to the Conservative’s “tough-on-crime” agenda, and this was seen in the voting results.

  5. June 22, 2011 2:24 pm

    Furthermore, as mentioned, marketing efforts and fundraising are intertwined. Sure, you may not be able to get money from those who are in poverty, but that doesn’t mean that you won’t be swaying them with anti-Tory rhetoric at the same time.

  6. Alfred Apps permalink
    June 22, 2011 5:45 pm

    The only thing you got wrong is that the Liberal Party is in the black, not knee-deep in debt. Otherwise, you are absolutely correct in your analysis. Alfred Apps, President LPC.

  7. June 22, 2011 9:45 pm

    Thanks for pointing that out! I guess now it is in the black under your watch, but I was referring to the time after the 2008 election, which I recall the removal of the per-vote subsidy would have negatively effected the party quite a bit.

    Though, if that is also incorrect, I’ll include an addendum at the end of my post.

  8. June 24, 2011 8:41 am

    So, basically this article summed up reads as follows:

    -The Liberals and the NDP are better to govern Canada
    -They need to fundraise more and increase their base
    -They’ll attack the Conservatives and win

    Nothing was said about introducing solid policy.
    Nothing was said regarding exactly WHY they will take the supporters away from the Tories- other than the “because we need them to win” morale…

    It was an interesting read that’s for sure, however I felt I was reading in circles, and this is a very hollow plan.

    We all know that they need more money, and assuming that just asking for it will work is not enough.

    Attacking is not always the best answer either; it would require actually taking a stance on something, in the case of the Liberals (other than, these guys are crazy dictators, vote for us), yes they have a brand- but it is more like a logo and a legacy, nothing behind it anymore.

    But hey, GM is a logo with a legacy and look where that got them… mind you they had government subsidies, so the Libs will have a tough time recovering that quickly.

    My point is that with the NDP sweeping up the centre, or trying to at least (with the socialism ordeal- however they are fighting inner-party divides over this), the Liberals have to come up with a solid stance in the current political environment, or else they cannot just increase their fundraising efforts.

    • June 27, 2011 11:42 pm

      It’s a culmination of a myriad of forces. However, I wanted to focus strictly on the consequences of removing the per-vote subsidy and how political parties will have to react to it as a result of this new reality.

      Policies do matter, but I don’t want to go into policies and platforms because I just want to focus on the externalities of fundraising. Each of the parties will have key planks in their platform which they will have to sell in order to get fundraising dollars.

      Why any of the parties will take supporters away from the Tories does not matter. It has always been about “We need them to win” regardless of party. As mentioned, see: Tories courting immigrants while offering nothing substantial to them. Dippers courting separatists while being a federalist party. What they will do to win “them” over I haven’t a clue, but they will have to in order to get those fundraising dollars.

      Attacking is not the best answer if it is the only thing you do, while not offering a substantive alternative. However, it’s a great thing to do if you attack another party while propping up your own simultaneously. In fact, I would argue that it is a necessity if you want to build yourself a fundraising base. What can tie you to a party is not just what you are, but what you are not, and attacks on other parties signify what you are not.

      Everything else is up in the air, so I would prefer not to make comments on that. I mean, the issues 4 years from now for the next Federal election will differ greatly from right now. Gas prices will spike up, perhaps even reaching close to $2 bucks a litre, which the unruly public may end up blaming on the incumbent government while there is ultimately no real solution to such a problem.

      And I doubt the NDP are sweeping up the center. See: filibuster. Regarding things like the Liberal Party and most other news, the media has a tendency to blow everything out of proportion. Read the headlines and here’s the basic gist of everything: The Liberal Party is Dead, Tories are now Natural Governing Party, Cell Phones Cause Cancer, Hack Attacks are Escalating, There is no such thing as Global Warming, Global Warming will Kill us all, G20 Cops are All Assholes, CUPW = assholes. All these headlines and all these opinions of journalists are largely utter crap. Journalists tend to understand very little while they report on everything. The whole NDP “sweeping the center” that I hear from pundits is something I’ll hold off on saying until 4 years from now.

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