How are political parties financed in Canada?

Federal political parties in Canada are financed through five main sources. Individual contributions from Canadian citizens or permanent residents are the principal source, capped at about $1,775 per registered political party per calendar year (with separate limits of $1,775 to a candidate or constituency association of a registered party, and $1,775 to a leadership candidate). Limits are indexed annually by the federal Bill C-24 reforms of 2003.

Election spending reimbursements are the second major source. Elections Canada reimburses about 50 per cent of national party election expenses if the party receives at least 2 per cent of the national vote (or 5 per cent in ridings where it ran candidates). Candidates are reimbursed about 60 per cent of their election expenses if they receive at least 10 per cent of the votes in their riding. Reimbursements are paid from federal general revenue and total about $50 million per federal election cycle.

The federal per-vote public subsidy was a significant funding source from 2004 to 2015. Under the Bill C-24 reforms, registered political parties received about $1.75 per vote received in the previous federal election (indexed). The subsidy was paid quarterly. The per-vote subsidy was eliminated by the Conservative government's Bill C-2 of 2008 (Federal Accountability Act amendments) and phased out by 2015. The elimination shifted federal party finance toward individual contributions and grassroots fundraising.

The Bill C-24 reforms of 2003 prohibited federal political contributions from corporations, unions, and other associations (except for very limited amounts to candidates and constituency associations, also subsequently prohibited). Foreign donations have always been prohibited. The Office of the Chief Financial Officer of each registered party reports contributions to Elections Canada quarterly, and Elections Canada publishes contributor names, amounts, and dates above $200 (since 2007). The Commissioner of Canada Elections enforces contribution rules. The 2024 Bill C-65 amendments tightened rules on foreign-influenced contributions and added new transparency requirements. Tax credits are available for federal political contributions: 75 per cent on the first $400, 50 per cent on the next $350, and 33.3 per cent on the next $525, for a maximum tax credit of $650 on a $1,275 contribution.