Canadian Federal Campaign Financing

Federal campaign financing in the U.S. is an unmitigated disaster and disgrace. The Canadian system seems far superior, but I don't understand how it works, so I'm doing some reading on the subject.

I know that Canadian federal candidates are far more dependent on public funding than are Americans (only presidential candidates are even eligible for public funding, and they may choose to forgo that, as Obama did in 2008; Senate and House candidates receive no public financing at all).

From an article entitled "Campaign Finance In Canada And The U.S.: Policies, Powers, And Prospects" by Clayton D. Peoples, University of Nevada, Reno: "By some estimates, 80% or more of Canadian election expenses are publicly funded."

So American officeholders have a funding base of big donors. If they manage to satisfy those donors during their time in office, most of them will be prepared to ante up for the next election. A relatively unknown challenger, on the other hand, will have to spend a lot of time and energy seeking donors.

That creates a phenomenon which is a great deal more significant in the U.S. than in Canada -- the power of incumbency.

90% or more of U.S. federal elections to the House and Senate are won by incumbents. In Canada, an incumbent does not have that built-in financial head start, and is therefore more vulnerable to a challenger; turnover is a great deal higher in Canada. For example, in the 1997 federal election, incumbents won 70.1% of districts. (That's from the Milligan-Rekkas study linked below.) So incumbency is an advantage in Canada -- simple name recognition, for one reason -- but not as important a factor as it is in the U.S.

I'm starting my examination of this subject with a preconceived bias toward the Canadian system, but the incumbency thing came as a surprise to me, and it's an important feature on the plus side for Canada.
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A candidate qualifies for reimbursement of 50% of his election expenses provided the candidate receives at least 15% of the valid votes cast in his electoral district.

Campaign Spending Limits, Incumbent Spending, and Election Outcomes
Kevin Milligan, Department of Economics, University of British Columbia
Marie Rekkas, Department of Economics, Simon Fraser University

A base amount of  $2.07 is awarded for the first 15,000 electors. For electors over 15,000 and under 25,000, an additional $1.04 per elector is awarded. Finally, for each elector over 25,000 an additional $0.52 is awarded. The amounts are adjusted each year by an inflation factor. Further adjustments are made according to a very complicated formula. (Trust me; unless you're a professor of political finance, you don't want to go there.)

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Another big difference: We don't have fixed election dates in Canada. The party in power never allows their theoretical maximum five-year term expire; they pick a time when they think the political climate is auspicious -- or, on the other hand, they see their fortunes to be going nowhere but down, so they'd better bite the bullet and declare an election now.  Our electioneering is limited to weeks -- the 1997 campaign I'm looking at just now lasted 36 days. Our most recent election, on May 2, was announced on March 26. In the U.S., the 2012 campaign for the Republican nomination is in full swing with a year and a half to go. Members of the U.S. House have two-year terms; they spend virtually their entire term fundraising for the next election. (Senators have a little more breathing room, with six-year terms.)