NDP: “Canadians are already footing the bill for Harper’s early election call – as much as a billion dollars.”
By: Rosanne Waters on
NDP in an online post on August 2, 2015
While a longer than expected campaign period of 78 days will come with a larger than predicted price tag, it is unlikely that the total cost of the election will approach $1 billion. The NDP counted all costs as variable, instead of both variable and fixed, to arrive at that figure. As for a more logically correct estimate, Elections Canada is still working it out.FactsCan Score: Misleading
The same day Prime Minister Stephen Harper called the 2015 election, a post on the NDP website claimed, “Canadians are already footing the bill for Harper’s early election call – as much as a billion dollars.”
The statement is poorly worded, and could lead people to think that only the extra campaign days will cost $1 billion, but considering wording used elsewhere, and the typical cost of federal elections in Canada, we interpreted the claim to refer to the total cost.
This election will definitely be expensive. By law, an official campaign period must last at least 37 days. This election, launched on August 2 with voting scheduled for October 19, spans 78 days.
But will the cost come close to $1 billion?
A report projecting Elections Canada’s 2015 to 2016 expenses, published before anyone knew this election’s actual length, put the cost at roughly $364 million. According to more recent reports, including in the Toronto Star and National Post, Elections Canada has estimated the tab for a 37-day election at a slightly higher $375 million.
A campaign period lasting twice as long will exceed the $364 to $375 million estimates. The question is by how much.
Election price tag
Election expenses fall into three categories: Operational costs, electoral engagement, and regulating electoral activities (which includes subsidies for political parties and candidates). All are set to rise.
On the operational side, a longer campaign means higher staffing, office space, and equipment costs, among other things. From an engagement perspective, voter outreach costs may go up if advertisements run longer.
As for subsidies, public money covering up to 50 per cent of election spending is available to eligible political parties, while candidates can reclaim up to 60 per cent of their expenses. Parties and candidates are subject to spending limits, but limits increase in a longer campaign. The amount rises by one thirty-seventh for every campaign day beyond 37 days. At 78 days, this pushes each party’s spending limit north of $50 million, much more than a 37-day campaign’s roughly $25 million limit. More spending means bigger subsidies. The same principle applies to candidates. The longer campaign means many candidates can spend more than $200,000, or about double a 37-day election’s limit.
Taxpayers also subsidize donations to parties and candidates through tax credits. Donations increase during elections, so the corresponding public cost of these credits also grows.
What will this election’s final tally be, given these varied costs?
The NDP’s math
A party spokesperson, Emily Watkins, explained by email how the NDP arrived at their estimate of nearly $1 billion.
The party estimated tax credits would cost $61 million in a 37-day campaign. This is based on a Department of Finance report on 2014 tax credits, the Canadian Taxpayers Federation’s prediction that credits will cost more in 2015 because contribution limits recently went up, and the increase in political donations during elections.
The NDP added this $61 million to Elections Canada’s more recent cost estimate of $375 million for a 37-day election. This brings their total to $436 million, or $11,783,783 per day in a 37-day election. Factoring in this election’s 78-day length, they multiplied the daily figure by 78, for a total of just over $919 million.
$375 million (37-day estimate)
+$61 million tax credits
= $436 million (or $11 million per day)
x 78 days
= $919 million
There is a key problem with this methodology: Some operational expenses are impacted by a longer campaign, but others remain the same. The fixed costs don’t simply multiply by day.
In a recent interview with CBC, Marc Mayrand, the chief electoral officer, said while the price tag will go up, it won’t double. “It’s not linear between the length of the election and the cost,” Mayrand said.
To highlight a few examples, Elections Canada staff in each riding will be paid to work more days. But there is still only one election day, so polling staff costs won’t change, nor will their training fees. Office leases and equipment fees will rise, but the prices to print ballots and voter reminder cards are probably unaffected. Voter engagement advertising will run longer, but the cost of maintaining a permanent list of voters is unlikely to increase. As Mayrand explained, “A big part of our costs are on voting days, and this doesn’t change” with the length of the campaign.
Operational costs will definitely be higher for a 78-day campaign, likely by tens of millions of dollars. But dividing $375 million by 37 days and then multiplying the result by 78 gives an inflated estimate. It treats fixed costs like they’ll keep rising.
One piece of Elections Canada’s projection that will rise substantially is the cost of party and candidate subsidies. The agency expected this to cost almost $80 million. For the sake of argument, we can assume that an election more than twice as long as the 37-day minimum will mean subsidies cost an additional $80 million.
If we take $375 million, consider tens of millions more in additional operational expenses, double the NDP’s figure of $61 million in donation tax credits, and add an extra $80 million in subsidies, however, we are still a long way from the NDP’s claim the election could cost “as much as a billion dollars.” A ballpark is $650 million to $700 million. But this range is speculation since the extra operational costs will be what drive up the price, and Elections Canada is still working those out.
|$375 million (37-day estimate)
+$122 million tax credits
+$80 million subsidies
+$100 million operation costs
We don’t know what the election will actually cost, so we can’t call the NDP claim false. But it is unlikely the price tag will fall in the billion-dollar range. Given this and the flaw in their methodology, the NDP’s claim is misleading.