Recycling $350 Million

The approximately $350M of public money spent on this election is not entirely wasted despite little change in Parliament's makeup. More precisely, although our tax money was spent, the money that was spent did not vanish in a puff of smoke never to be seen again. While not quite a law of physics, there is to a large degree an economic law of conservation of wealth. Let's look at this more closely.

Public money was spent by Elections Canada on the balloting process and on staffing. It also goes into the parties' election funds (proportional to the number of votes a party got in the previous election). So, where did all that money go? How was it transformed by the election?

• Salaries to temporary elections staff, like any salaries, get spent by those workers on food, gas, utilities, paying off debt, and so on, thus recirculating through the economy by driving the businesses receiving that money for goods and services. A portion of it is taxed at both personal and business levels, thereby finding its way back into federal and provincial coffers.
• Signs, posters, leaflets, campaign offices and media air time increase the revenues of printing, real estate and media sectors, which then trickles down to their employees and suppliers. It also is taxed and some finds its way back into government treasuries.
  
• Printed material, when on paper, is mostly deposited by us in recycling bins. The stuff in our mailboxes is (sometimes) read and then thrown into the black box and carried out to the curb for pickup. From there the material drives a spike of business in the recycling sector by being resurrected as ... um ... disposable coffee cups and MP circulars that again go into the black box. And so on. Of course all this economic activity is also taxed.

The $350M didn't disappear. It has been redistributed throughout the economy. Taxation based (largely) on ability to pay has been injected back into selected portions of the economy. Like the forces driving entropy increase in the natural world, eventually monetary equilibrium is restored in which all that money tends to spread back out to everyone over time.

No, not quite all the money is recovered. Since it is not going into productivity-enhancing activities like research & development or new machinery there is a frictional loss; some of our wealth is permanently lost. It goes into landfills and asset depreciation, and perhaps leaks out through some other holes in our economy system.

In the end the question you have to ask yourself is that, since nothing has fundamentally changed as a result of this election, were you sufficiently entertained for the amount of money represented by the unrecoverable loss of wealth? The initial outlay was about $10 per citizen so, assuming a 50% efficiency at wealth recovery throughout the economy, it cost you $5. That's little more than a premium cup of coffee and far less than a movie ticket. That's not too bad.