The Funding of Political Parties

by Apathy is Boring Intern Patrick Burkhard — July 19, 2007

    Nothing is more important in a democratic system then how its electoral system works – if the elections system is corrupt, it is a pretty good indication the rest of the government isn’t too fair or representative.  Luckily for us Canucks we like words like accountability, transparency, openness, fairness.  You know there is a guy out there trying to ruin the election party for all of us, but the government has this whole Election Day wrapped up in a nice pretty package no one can mess with.

    This also means that the party system itself should be fair, legal and open to the public.  Elections and more specifically party funding are all governed by the Canada Elections Act.   Reason:  We need to see exactly who is paying for/funding whom – to make sure that the government isn’t being bought by anyone.  Now this doesn’t mean that a government won’t have its allegiances or represent any specific interests at all – it just means that we try and keep things on an even playing field. 

    There are two important government actions which helped to keep our elections clean.  The first was the introduction of political party registration in 1970 as well as the Election Expenses Act of 1974, which saw put into place limits of election expenses for candidates and parties and public funding for election campaigns.  These measures cannot be undervalued.  Without limits of spending, we would have a campaign money orgy just like they do down in the U.S.  It always gets my goat every election to see candidates spend $100 million on their campaign when that money could have been put towards fighting poverty or feeding the hungry! 

    The second important thing about the Election Expenses Act is that it makes available public funding; anybody can run for government – me, you, and your momma too!  It evens the playing field, making it less of a race to see who can raise or come up with the most money. 

    Following all of these regulations is a recent commitment by governments, specifically the Conservatives, to make everything more accountable and open.  Recent changes have been made in years past to lower the amount of money individuals as well as organizations can donate to political parties or candidates. 

Contribution Limits

Here is a summary of recent changes which happened between 2004 and the present day:

•    Corporations and Trade Unions are no longer able to donate to candidates or parties. 

•    A Canadian citizen or permanent resident is allowed to donate a maximum of:
o    $1,100 per year to EACH of the registered political parties.
o    An added total of $1,100 per year to registered electoral district associations (specific riding association), nomination candidates (someone trying to run within a party), and candidates from each of the political parties
o    $1,100 per election to each independent candidate
o    An added total of $1,100 to all of the candidates in a leadership race within a political party.

    Make sense to everyone out there?  I know this all sounds a little complicated, however the important thing to consider here is that these amounts are not all that much.  Some people may be considering why people would donate so much, or even donate to more then one party?  That reminds me of a story told once by a leader of a major corporation – when asked how he tries to influence the government and the political process, he reached into his desk and produced membership cards to every major political party.  Being a member and a financier to a party means he is able to attend party meetings and give his opinion on what policies he would like to see.  If someone contributes large sums of money to a party, they have a better chance of getting someone’s attention or at least getting someone to listen to you, at least once.  Another reason people donate to parties is the fact that political contributions are also tax deductible!  That means money back at tax time.  It should also be added that you can view political contributions to parties online.  Check the Elections Canada website for details to see who is giving out what.

Expense Limits

    One other measure often employed to level the playing field is to limit the amount of money parties and candidates can spend during an election.  The Canada Elections Act has a strict definition of what can be considered an “expense” so check it out for more details. 

    The limits are all calculated based on a formula which takes into account the total number of people on the electors (people trying to get elected) list for each electoral district. 

During the last election (39th), the spending limits were as follows:

•    Limit for a political party with only one candidate:  $68,155

•    Limit for a political party which runs candidates in all 308 ridings:  $18,278,279 (average of $59,345.06 per riding)

•    The final limits for candidates ranged from $62,210 to $106,290. 

    Now all campaign expenses which are to be claimed are then made public afterwards – as are individual contributions to political parties which are also registered. 

Public Financing

    You have to love Canada for this one –  their requirements and regulations make it easy for independents as well as political parties to get access to public funding.  Translation:  you don’t have to be rich to run for office.  Audits are completed on every submission for public funding as well – to ensure even greater transparency.

•    For Candidates:  If you are elected or receive at least 10% of the votes cast in your riding, as long as you pass your audit, you are entitled to receive funding for a maximum of 60% of your personal and election expenses relating to the election. A person's nomination deposit of $1,000 (running ain't free) is also returned at this point

•    For Parties:  Registered political parties can get reimbursement for 50 % of all their campaign if they receive 2% of the national total vote or 5 % of the vote in an electoral riding.  This is why voting for a small candidate or fringe party can make a difference, even if they don’t win, by putting money directly into their pocket!  This fact makes me smile as it constantly encourages small parties to flourish and grow.