Politics Needs Money
Running an election campaign isn’t free. Every flyer, yard sign, and campaign office comes with a cost. Campaigns also need to pay for staff and essential services.
That’s why it’s important for supporters to help candidates and parties financially. Your contribution ensures they have the resources to share their message and achieve their goals.
Why Donations Still Matter, Even with Public Support
Some people say, “Political parties are subsidized, so we don’t need to donate.” While it’s true that political parties receive some funding from taxpayers, that doesn’t mean donations aren’t necessary. Let’s break it down. Canada’s political funding system works in two main ways:
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Campaign Expense Reimbursement1:
The government reimburses up to 60% of campaign expenses if a party and its candidate receive more than a certain percentage of the vote. But this only applies after the money has been spent. Without donations, there’s nothing to spend, so they wouldn’t qualify for reimbursement. -
Tax Credit for Contributions2:
When you donate to a political party, the government provides a tax credit to you, not directly to the party. For example, if you donate $400, you receive a 75% tax credit, meaning you only pay $100 out of pocket while the government returns $300 through your tax refund.
Technically, this is not a subsidy for political parties. However, tax credits reduce government revenue, and from a broader fiscal perspective, this shortfall must be offset, either through increased taxes or reduced services. Because of that, some people argue that this credit indirectly subsidizes political parties.
Even from that broader perspective, if nobody donates, no tax credits are issued, so no public money is directed this way.
In short: no donation, no subsidy.
Sidetrack
Situation before 2015
Historically, Canada had a per-vote subsidy system. This meant political parties received public funding based on how many votes they received in an election. That system was phased out in 2015. So if someone says parties automatically get government funds, they may be referring to that older model, which no longer exists.
My campaign experience
Campaign Office
The first campaign office I visited in Canada was in a building slated for demolition. It was far from the sleek offices you might imagine, nothing like a startup hub or a corporate suite. My first thought was, Are they okay? Wasn’t there a better place than this?
However, once I started volunteering and saw the number of signs, literature, and other materials being used, it all made sense. Each of those things cost money, and that money came from donations by individual supporters. That’s when I realized why minimizing office rental costs was so important.
Canadian Parties Rely on Small Donations
To keep politics fair and accessible, Canada has strict limits on contributions each individual can make3:
- Up to $1,750 per year to each federal party
- Up to $1,750 per year combined to all riding associations of each party
- Up to $1,750 per campaign to individual candidates and leadership contestants
(These limits are for 2025 and increase by $25 each year.)
Businesses and unions are not allowed to donate. These rules ensure that no single person or group can dominate the political process.
Combine Your Vision with Tax Savings
Supporting politics in Canada doesn’t just help shape the country’s future, it can also reduce your taxes.
You can claim a tax credit of up to $650 per year for federal political contributions. For example, on the first $400 you donate, you get 75% back as a tax credit.
Tax Credits for Federal Political Contributions
| Credit % | Max Amount | |
|---|---|---|
| Credit on first $400 | 75% | $300 |
| Credit on > $400 to $750 | 50% | $175 |
| Credit on > $750 to $1,275 | 33 1/3% | $175 |
| Total Max Amount | $650 |
So if you look at it differently, this system becomes quite powerful: By giving $100, you’re essentially directing $300 of taxpayer money to the party you support. You help decide where public money goes based on your own values.
Additionally, through doing so, you might even get the chance to meet a minister in person at an event, someone you might otherwise only see on TV.
On the other hand, when others donate, they receive a tax credit that reduces government revenue. If you don’t donate, you’re not taking advantage of this benefit, yet the tax system still supports the credit program. That means other people’s donations could help parties you don’t support.
See also the article:
Key Takeaways from This Topic
Why do political campaigns need donations?
Donations fund essential campaign costs like flyers, signs, staff, and office space. Without financial support, campaigns can't operate effectively.
Don’t political parties already get public funding?
Yes, but only after an election. Campaigns must spend money first to qualify for partial reimbursement, so donations are still critical.
How does the campaign expense reimbursement work?
If a party and its candidate get enough votes, up to 60% of campaign expenses can be reimbursed. But this only happens after the money is spent.
What tax benefits do I get when I donate?
You receive a tax credit, for example, 75% back on the first $400 you donate. This lowers your out-of-pocket cost significantly.
Is the tax credit a subsidy for political parties?
No, the credit goes to donors, not parties. While it reduces government revenue, no public money is used unless someone donates.
Did parties used to get public funding automatically?
Yes. Until 2015, parties received public funds based on vote totals. That system has been eliminated.
How much can I donate to political campaigns?
In 2025, individuals can donate up to $1,750 per year to a federal party, $1,750 in total to all riding associations of each party, and $1,750 per candidate or leadership contestant.
Can businesses or unions donate?
No. Only individual citizens or permanent residents are allowed to make political contributions.
How much tax credit can I receive?
You can get up to $650 per year in federal tax credits for political donations, depending on how much you contribute.
References
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Political Financing Handbook for Candidates and Official Agents (EC 20155) – February 2025, Elections Canada ↩
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Line 41000 – Federal political contribution tax credit, Government of Canada ↩
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Limits on Contributions – 2025, Elections Canada ↩