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Federal political donation and loan limit should be lowered to $75, public funding implemented if parties can’t raise enough

Unprecedented study of donations and loans from 2016-2022 shows about 75% of donors donate only about $75 a year, only 5% donate more than $1,000

Allowing big money donations facilitates illegal funneling of donations, unethical influence, and foreign interference in Canadian politics

Wednesday, February 21, 2024

OTTAWA – Today, Democracy Watch released its unprecedented study of political donations, loans and taxpayer-funded subsidies to the main federal parties from 2016-2022 (2023 is not included because most final stats are not yet available).

The statistics show that the current political finance system is rigged in favour of a few wealthy donors, wealthy candidates, the big parties and Canada’s Big Banks, and is unfair, undemocratic, corrupting and essentially a legalized bribery system.

The conclusions of the study are that to have fair, ethical and democratic federal elections and policy-making processes, the annual donation and loan limit should be lowered to $75, and if the parties can prove they can’t raise enough funding to inform voters, run their operations and election campaigns then public funding should be provided by matching donations, giving loans from a public fund (instead of allowing unethical loans from federally regulated banks), and giving election cost reimbursements to all parties (not just the main parties).

The same changes are needed across Canada (except in Quebec which already has a $100 donation limit, donation-matching and other public funding), especially in Saskatchewan, Newfoundland and Labrador, and the Yukon where unlimited donations are still allowed from businesses, unions, other organizations and individuals.

Click here to see an infographic webpage that summarizes the key findings of the study, and contains links to detailed charts and analytical documents.

The key findings of the study are as follows:

1. About 75% of donors to the main federal parties donate only about $75 a year;

2. Only 5% of donors donate more than $1,000 a year – only 11,000 voters out of Canada’s total of more than 27 million voters donate more than $1,000;

3. Because their donations are so much larger than other donors, these 11,000 donors who donate $1,000+ provide on average 30% of the total raised by the main parties each year (especially to the Liberals and Conservatives).

4. The system also favours wealthy nomination contestants as they are allowed to donate $1,000 to their own campaign, wealthy election candidates who are allowed to donate $5,000 to their own campaign, and wealthy party leadership contestants who are allowed to donate $25,000 to their own campaign;

5. Allowing big money donations facilitates illegal funnelling of large amounts of money to federal parties, including foreign governments funnelling donations through front-groups and individuals in Canada, and gives big money donors unethical influence over politicians;

6. Only about 240,000 voters donate each year out of more than 27 million voters, and 9 out of 10 donate less than $500, and they donate $52 million on average to the main parties;

7. Most of the main parties spend what they raise each year, and rely on huge loans from federally regulated banks and financial institutions to pay for their election campaigns (these loans should instead come from a public fund);

8. Lowering the donation limit to $75 would mean the parties would have to attract $75 donations from only about 500,000 more voters (out of the more than 26 million who don’t donate now) to raise the same amount they currently raise each year (the Conservatives would need about 220,000 more donors, the Liberals about 170,000, the NDP about 63,000, the Greens about 30,000 and the Bloc about 10,000), and;

9. Taxpayers subsidize the main parties with about $27 million each year in tax deductions for donations (that mostly go to wealthy donors, and tens of millions more during election years), and about $63 million in post-election campaign cost reimbursements (that almost always goes only to the main parties and their candidates). It would be much more democratic to use this public funding to match donations and reimburse all parties’ and candidates’ election costs.

“Canada’s current undemocratic and unfair big money political finance system is rigged in favour of wealthy donors, wealthy candidates, big parties and the big banks, and the best way to make the system fair and to stop the unethical influence of big money in Canadian politics is to stop big money donations and loans and, if the parties can prove they need it, provide donation-matching public funding, loans from a public fund and election campaign cost reimbursements to all parties and candidates,” said Duff Conacher, Co-founder of Democracy Watch, whose PhD thesis contains most of the research, and detailed recommendations, in Chapters 3 and 6 of the thesis. Democracy Watch thanks Cameron Flanagan and Justin Myers for their assistance in completing the political donation calculations for each year.

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Duff Conacher, Co-founder of Democracy Watch
Tel: (613) 241-5179
Cell: 416-546-3443
Email: [email protected]

Democracy Watch’s Money in Politics Campaign and Stop Foreign Interference in Canadian Politics Campaign