The finances of Québec's provincial political parties in 2012 - Operating deficits, an important reduction in net assets and greaterfinancial support from the state

September 25, 2013

Quebec City, September 25, 2013 –– The Chief Electoral Officer of Québec,  Jacques Drouin, disclosed today the financial reports of the 20 provincial political parties that were authorized in Québec as of December 31, 2012. This portrait of the parties’ finances reveals that over the course of the last year, parties, as whole, registered operating deficits, incurred significant reductions in their nets assets, and received greater financial support from the state. In fact, 2012 can be considered a transition year between the December 2010 reform of political financing, which lowered the maximum contribution from $3,000 to $1,000, and  the reform that came into force on January 1, 2013,which continued to substantially increase financial support from the state. At the end of the 2013 fiscal year, it will be possible to develop a clearer picture of the provincial parties’ finances and future prospects in this regard.

The various reports are published in two different documents, with the first volume presenting information concerning the financial situation of the provincial political parties and the second containing the lists of persons having made contributions to political entities. The Chief Electoral Officer is also publishing today an information document for the general public entitled Statistiques sur les rapports financiers des partis politiques provinciaux   (Statistics concerning the financial reports of provincial political parties). The financial reports and statistics document are available on the Chief Electoral Officer’s website at http://www.electionsquebec.qc.ca/francais/provincial/financement-et-depenses-electorales/rapports-financiers-provinciaux.php.

A decrease in party revenue and “value”

In 2012, Québec’s political parties, as a whole, generated $29.9 million in revenues (proceeds) and recorded expenses (spending) in the amount of $37.1 million, which represents an overall deficit of $7.2 million. The three main revenue sources for parties over the course of last year were the allowance provided by the Chief Electoral Officer ($4.9 million, which represents 16.3% of the total amount), contributions by electors ($10.2 million, which represents 34% of the total amount) and the reimbursement of election expenses ($12 million, which represents 40.3% of the total amount). The election expenses incurred and paid for by political parties (including general elections and by-elections) reached $20.4 million, which explains the operating deficits. All of the parties represented at the National Assembly at the end of the year and their authorities (local associations) posted negative results last year.

Another indicator of the political parties’ financial health is their net-asset balance sheet; in other words, the net value that would remain if all liabilities had to be discharged using assets (debts paid using owned property). If the total of these net assets at the end of 2011 ($7.3 million) is compared to the shortfall in assets recorded in the 2012 financial reports (-$2.1 million), it will be noted that parties lost $9.4 million in “value” by the end of the last fiscal year. 

Grassroots financing and state participation in 2012

It is worth recalling that 2012 marked the second year that the reform of political party financing, adopted in December 2010, was applied. The reform lowered the maximum contribution that can be made to a political party from $3,000 to $1,000. To make up for this revenue loss, the state’s contribution to the base amount that is divided among the parties in the form of an annual allowance (according to their election results) increased from 50 cents to 82 cents per elector whose name is entered on the list of electors, before being set at 85 cents at the beginning of 2012.

The lowering of contribution revenues that could have resulted from the reform did not materialize last year, given the electoral context that encouraged many electors to make donations to parties. As a result, contribution revenues were 35% higher in 2012 than in 2011. However, these revenues represented only 34% of the parties’ total revenues, which is a reversal compared, for example, to the last election year (2008), when donations from electors represented 55% of revenues. We should keep in mind that at that time $3,000 contributions to political parties were still permitted.

Among the four parties represented at the National Assembly, the Parti québécois collected contributions from the greatest number of electors (23,795) in 2012, almost twice the number of electors (12,113) who contributed to the Parti libéral du Québec. It is also worth noting that the total amount in contributions received by the PQ was $3.7 million, compared to $3 million for the PLQ. For their part, the Coalition avenir Québec – L’équipe François Legault collected contributions totalling $1.9 million from 8,734 electors in 2012, while Québec solidaire collected contributions totalling $963,000 from 6,911 electors. If these figures are compared to the statistics for 2008, the Parti libéral experienced the biggest decline in the number and value of contributions it collected. Comparative information regarding contributions collected by each of the political parties may be found on pages 35 to 39 of the statistics document.

To the amounts raised by the parties in the form of contributions are added the sums provided by the Chief Electoral Officer in the form of an annual allowance based on the number of votes garnered by each of the parties during the previous general election, as well as the reimbursement of expenses incurred in auditing the annual financial report and the reimbursement of election expenses. On this last point, it is important to keep in mind that the political parties that took part in the September 4, 2012 general elections collectively filed $20.1 million in reimbursable election expenses.

In 2012, the Chief Electoral Officer provided $4.8 million in annual allowances, compared to $4.7 million in 2011. Information on the annual allowances paid by the state to each political party for 2012-2013 is provided on pages 49 to 52 of the statistics document.

The portrait of public financing should be quite different in 2013 as a result of the reform that was adopted by the National Assembly at the end of 2012 and that came into force on January1, 2013. It should be pointed out that under the new provisions of the Election Act, the state’s “contribution” to the base amount that is divided among the parties (according to their election results) increased from 82 cents to $1.50 per elector. Moreover, a contributions subsidy system is now in effect, according to which the Chief Electoral Officer contributes a certain amount for each dollar collected by a political party, up to $220,000, which can represent a subsidy of up to $250,000. More details on this matching mechanism are available on the Chief Electoral Officer’s website at http://www.electionsquebec.qc.ca/contribution/francais/appariement-bonification.html. Lastly, the reform provides for a supplemental allowance to parties in the amount of $1 per elector, which is paid when a general election is called.

Public financing was therefore increased in order to make up for the reduction in the maximum amount that each elector can contribute, which decreased from $1000 to $100 as ofJanuary 1, 2013.

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Categories : Provincial, Provincial financing, DGE