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analysis

Kathleen Wynne's Liberals are nearly broke.

That they are not completely broke owes to a new annual per-vote subsidy, introduced last year alongside new provincial fundraising rules, that puts about $5-million into their coffers in 2017. Otherwise, those new rules – which include a ban on corporate and union donations, a lower limit for personal contributions and an end to MPPs appearing at fundraising events – have reduced the Ontario governing party's income to a trickle. And unlike the rival Progressive Conservatives, the Liberals did not adequately brace for this new reality by raking in every available dollar before the rules came into effect.

Despite currently being a couple million dollars in debt, the Liberals will probably still spend the limit during the writ period of next spring's provincial election, by borrowing what they need to get there.

But there is nevertheless much second-guessing currently among Liberals about the changes that Ms. Wynne implemented in response to criticism of her party's trading of access for cash. Their dire financial situation is impeding them from improving their long odds of re-election before the campaign begins – something evident right now, if only in what voters are not seeing from them.

Read more: An inside look at cash-for-access Ontario Liberal fundraisers

The summer before an election – and before a new $1-million-per-party limit for the six months prior to the writ period kicks in – is a good time for parties to launch advertising campaigns conditioning voters for their coming pitch. And the Liberals could scarcely have more need for such efforts.

While recent polls have shown their overall support numbers ticking up to a more competitive second place behind the Tories, they need to do something about Ms. Wynne's dismal personal approval numbers, by some measures the worst of any premier in Canada. Something along the lines of what their party did to reintroduce Dalton McGuinty before his last election as their leader – a minute-long, heavy-rotation ad in which he crisply appeared before a white backdrop to acknowledge his unpopularity and sell himself as a maker of tough decisions – would be an obvious move.

In Ms. Wynne's case, that would presumably involve fashioning the array of left-leaning policies announced around this year's budget (among them a $15 minimum wage, a new pharmacare program for younger Ontarians and a housing-affordability package) into a concise and coherent mission statement aimed at paving the way for the Liberals' base to return to the fold.

At the same time, many Liberals would also like to be using advertising to frame Patrick Brown, the little-known rookie PC Leader, before he is able to make an impression on his own terms.

But the Liberals can't afford to do any of that. So while Mr. Brown is now introducing himself with new, soft-focus ads that seem to be airing heavily on TV programming that predominantly appeals to female voters with whom his party has long struggled, the Liberals are stuck ceding the pre-campaign air war to him.

Liberal sources suggest that may change slightly soon, with their party launching online ads. But while there may be more value there than in traditional media, even digital spots usually require money behind them to find audiences, and the Liberals will instead likely have to hope they produce such compelling content that it gets widely shared for free.

Not that it's just advertising on which they are currently forced to skimp. Earlier this year, they laid off much of the staff at their party office. And they're not well-positioned to spend on campaign preparation through volunteer training or data management.

Their opponents are not exactly thriving under the new fundraising rules, either. While the Liberals did worst among Ontario's major parties in the first quarter of this year, raising a paltry $61,000, neither the PCs ($141,000) nor the NDP ($62,000) did consequentially better. But the Tories, at least, erased their party debt with a blitz before the restrictions took hold, more than doubling the Liberals' 2016 intake with an astonishing $12.6-million.

And while a Liberal official said the second quarter of 2017 looked more promising than the first proved, that party still seems more ill-suited than its rivals to quickly adapt to the regime it put in place. Centrist parties lacking impassioned grassroots supporters can struggle with systems that require a large number of relatively small contributions (in this case, a maximum of $1,200 per person, albeit tripling if they give to a party, riding association and candidate in the same year). And it's hard to imagine even people who are willing to vote for a scandal-plagued provincial Liberal Party that has been in power a decade-and-a-half being motivated enough to donate.

To those of us on the outside, this may seem a reasonable and overdue consequence of shifting away from an outdated willingness to let big money buy influence. To a good number of provincial Liberals, Ms. Wynne's attempt to belatedly take the high ground – including by scaling back dodgier fundraising practices slightly before her legislation required, helping explain the big deficit to the Tories in 2016 – just looks self-defeating.

Outspending opponents well before an election hardly assures victory; if the Liberals campaign effectively next year, and the Tories and New Democrats poorly, all of the above may be moot.

But there is another reason for the Liberals to fear their current financial state. Their borrowing, to spend the limit next year, will largely be against their per-vote subsidy. If they win, or lose narrowly, they'll get the money to pay it back. If the bottom falls out and they wind up under 25 per cent of the popular vote – or if Mr. Brown won and then followed Stephen Harper's lead by doing away with the subsidy altogether – they could really wind up broke, with consequences far beyond a little forced restraint before turning on the election taps.

Ontario’s next provincial election is scheduled for June 7, 2018. The province’s three main political party leaders weigh in on what they see as their biggest challenges in the 12 months before the vote.

The Canadian Press

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