Copyright 2011, Blake, Cassels & Graydon LLP
Highlights
- Corporate donations prohibited
- Individual donations limited to C$1,100 per party, per year
The recently called Canadian federal election, following a vote of non-confidence in the minority government by the opposition parties, highlights the rules applicable to federal political contributions. The rules are unchanged since the enactment of the Federal Accountability Act in 2006, which brought about sweeping changes to the Canada Elections Act, as discussed in our June 2006 Blakes Bulletin: Federal Political Contributions – Shifting the Goalposts. However, the political contribution limits are subject to inflation adjustment, and have been increased since then.
Individual Contributions to Political Parties
Citizens and permanent residents of Canada can make
political contributions of up to C$1,100 in total per calendar year
to the registered associations, nomination contestants and
candidates of a particular registered party. This upper limit of
C$1,100 is subject to inflation adjustment. The amount was
originally set at C$1,000 upon the introduction of the Federal
Accountability Act in 2006.
Similar rules apply to contributions to non-affiliated and independent candidates.
Corporate Donations Prohibited
All other entities, including corporations, unions and unincorporated associations, are prohibited from making any political contributions whatsoever.
Personal Tax Credits
The Income Tax Act offers a maximum tax credit to individual taxpayers of C$650, calculated as follows:
- 75% on the first C$400;
- 50% on the next C$350; and
- 33-1/3% on any amount over C$750.
Penalties
The Canada Elections Act includes provisions that prohibit circumventing the limits of the legislation or the requirement that contributions not be made by persons or entities other than individuals, or colluding for that purpose.
The penalties for breach of the provisions relating to contribution limits include a C$1,000 fine, three months' imprisonment, or both.
Leadership Contests
The Canada Elections Act also permits individuals who are citizens or permanent residents of Canada to contribute up to C$1,100 in total to leadership contestants in a particular leadership race. Other entities are not permitted to contribute to leadership contests.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
