How Canadian Political Parties Are Funded

How Canadian Political Parties Are Funded

How Canadian Political Parties Are Funded

With a Federal Election occurring in under a week, a suspenseful atmosphere has engulfed Canada. Daily polls have been seesawing back and forth with only a slight gap between the main political parties. News is also leaking out out that nearly 3.6 million voters participated in the advanced polls, a massive turnout that represents approximately 13.8% of all eligible Canadian voters and is 71% greater than the turnout at the 2011 advanced polls. The way that these domineering Political Parties finance their operations will be the focus of this article.

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So, there are two ways that Political Parties receive financing, this being through public and private financing. Public financing is paid by the Canadian Government and makes up the largest source of political financing. Private funding are contributions made by individuals in support of a political party.

Public Government Funding

Electoral Expense Reimbursement

The largest source of funding is through political reimbursements. Canada reimburses 50% of eligible election expenses when a political party receives 2% of total votes or 5% of valid votes in an electoral district. If they receive 10% of eligible votes, individual political ridings will have their expenses reimbursed by 60% and any personal expenses will be fully reimbursed.

Tax Credit for Political Donations

Canada will also reimburse all individuals that donate to eligible political parties. Reimbursements are based on the total amount contributed. Contributions up to $400 will be reimbursed by 75%, those between $400-$750 will be reimbursed by 50% and those over $750 will be reimbursed by 33.33%. Reimbursements are tiered; therefore the portions of a donation are reimbursed at each rate. For example, an $800 donation would be reimbursed $492.67 ($300 for the first $400, $175 for the next $350 and finally $16.67 for the last portion.) The limit to this tax credit is $650.

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Per Vote Subsidies

This form of funding was completely eliminated in 2015, but is still worth commenting on. The concept was that political parties would be paid an amount directly tied to how many votes they received. This amount was inflation adjusted and was $2.04 per vote in the previous 2011 election. Qualifications were similar to the Electoral Expense Reimbursement; a political party most receive 2% or total votes or 5% of valid votes in an electoral district to have qualified.

Private Political Funding

Simply, these are contributions that are made by individuals, limited to $1,500 for each layer of government every calendar year. All contributions are eligible to receive the Tax Credit for Political Donations. Corporations and Trade Unions are not eligible to donate.

And these are the main ways that Political Parties in Canada are funded. Many debates arise out of these and as always I just provide the raw information and let you form your own opinion.

That’s it for this week, but if you any questions please contact me at info@ffcoach.ca or 647-289-0012. Also, don’t forget to subscribe to the newsletter below.

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