A Cap on Donations?: The Canadian example
The provisions for spending limits and public financing in Canada bring a combination of floors and ceiling, by providing, on the one hand, direct and indirect floors by means of reimbursements of party and candidate election expenses, annual allowances to the parties and tax credits for individual contributions and, on the other hand, ceilings on candidate spending, nomination contestant spending, political party spending and strict limits on special interest or "third party" spending.
Contribution limits relate to who may contribute, how much, to whom, and when. The 2003 amendments introduced:
· A ban on contributions from corporations and unions (and unincorporated associations) to political parties and contestants in party-leadership selection contests;
· $1,000 annual limit on contributions from these three sources to candidates, nomination contestants and local party constituency associations;
· $5,000 annual limit on contributions from individuals to parties, constituency associations, candidates affiliated with a registered party and nomination contestants;
· $5,000 per event limit on contributions to independent candidates;
· $5,000 per event limit on contributions from individuals to party-leadership contestants;
· $5000 exception for contributions subject to the limit for contributions from a nomination contestant or candidate to his or her own camping and a $5,000 exception for contributions from a leadership contestant to his or her own campaigns and;
· contributions are barred from government corporations or corporations that receive more than 50% of their revenues from the government.
Contribution limits are adjusted for inflation each April.
The National Democratic Party of Canada has not been financially disadvantaged by a ban on trade union donations, nor has their historic links with the unions been severed by this change in the financial relationship. Instead, the NDP has seized the opportunity to re-evaluate links with the unions, which not only have served to strengthen the relationships, but also to broaden the party's membership base (see paragraphs 104 and 105).
Quarterly allowances to the political parties were introduced by the 2003 amendments. To qualify, a party must have received 2% of the national vote in the previous election or 5% of the total vote in the constituencies where they nominated candidates. The party then receives on an annual basis $1.75 per vote obtained in the previous election. This allowance is adjusted for inflation each April 1st. If they fail to make the thresholds, they lose their access to public funding. Beyond annual allowances, the parties that qualify receive partial reimbursement of election campaign expenses; they will receive 60% of their actual expenses in the first general election held after January 1, 2004, and thereafter, 50% of actual election expenses; since the 2003 legislation, research expenditures are included as election expenses and are partly refundable.
Candidates that receive at least 10% of the valid votes cast are also eligible to receive a partial reimbursement of election expenses. 60% of election and candidate personal expenses are reimbursed to eligible candidates up to a maximum of 60% of the election expenses limit.
Indirect government funding includes provisions of the Income Tax Act, which provide individual tax credits for political contributions, as follows:
- 75% of contributions not exceeding $400;
- contributions over $400 but not exceeding $750, $300 plus 50% of the amount that exceeds $400;
- contributions exceeding $750, the lesser of $475 plus one-third of the amount exceeding $750, or $650.
Adapted from: Herbert E. Alexander, Comparative Analysis if Political Party and Campaign Financing in the United States and Canada, in Griner and Zovatoo The Delicate Balance between Political Equity and Freedom of Expression: Political Party and Campaign financing in Canada and the United States (Organization of American States (OAS) International IDEA, Washington D.C.)
Note: Unincorporated associations are defined by the Canada Elections Act as an unincorporated organization-other than a trade union-together with all of its branches, chapters or any other divisions. Such organizations may make contributions from funds collected from individuals for the purpose of making a contribution to a candidate, nomination contestant or registered association.
$1 Canadian =£0.44p.
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