This is the second post in a series. The first can be found here.

Yesterday's post provoked an interesting question on Facebook.   I presented a graph showing that corporate donations go mostly to the party in power and the major recipient party switched from Liberals to PCs when the government changed in 2003.  But did the PCs win the 2003 election because they received more donations, or did they start receiving more donations because they won (or were expected to win)?

First observe that the PCs saw an uptick in donations in 2002, the year before the election.  My guess is that businesses sensed which way the wind was blowing and began hedging their bets by donating to both parties.  Unfortunately, I can't find good polling data from those days to determine at what point a PC victory became likely, so it is tough to make any inference based on expectations at the time.

However here is another test.  If businesses were simply supporting their preferred party in 2003, then you would expect some businesses to donate to the Liberals, some to the PCs, but not very many to support both.  On the other hand, if businesses are trying to curry favour with government, then you would expect most businesses to donate to both parties in order to hedge their bets.

Here is the data.  I've included all companies that donated $10K or more.  Looks to me like most companies are hedging, consistent with the "pay-to-play" hypothesis.


Top Contributors to Provincial Parties in 2003:

	PC	Lib
Kruger Inc.	10000	28000
North Atlantic Refining Ltd	9000	17000
Inco	11750	14000
A Harvey & Co	10000	12250
Nfld Design Associates	7000	15000
Pennecon 2000 ltd	11000	11000
Aliant Inc.	10000	11400
Abitibi Consolidated	1750	18500
CIBC + CIBC Wood Gundy	5000	15000
BAE Newplan Group Inc.	12000	5000
Husky Energy +Husky Oil	8000	9000
SGE Acres Ltd	10000	6000
BMO bank and Nesbitt Burns	5000	10000
Hatch Associates Ltd.		15000
Reid & Associates		15000
AMEC	9000	5000
Labatt Breweries	4000	10000
Fortis	9250	4400
Island Waste Management	5000	8000
RBC bank + securities	2500	10000
Bristol Group	2000	10000
British Confectionary	4000	8000
Rogers Group	11000	1000
Archean Resources Ltd.	11750
AE Consultants	1500	10000
Woodward's Oil Ltd.	2000	9500
Fishery Products Int.	10000	1400
CHC Helicopter Corp.	10000	1000
NL Consulting Engineers	7000	4000
Insurance Brokers Ass.	10000	800
Barry Group	10000	500
Myles Leger Ltd	7400	3000
Molson Canada	4200	6000
Becktel Canada Ltd	10000
Cougar Engineering and Construction	2000	8000
Imperial Tobacco Canada	5000	5000
J-1 Contracting		10000
Provincial Airlines		10000
Rothmans' Benson & Hedges		10000
Scotiabank	2000	8000