Replacing Allowances for Canada’s National Political Parties

The Conservative government has repeatedly announced its desire to cancel the quarterly allowances paid by Elections Canada to political parties. In this paper, we examine alternative party finance mechanisms to cope with the revenue loss caused by eliminating the quarterly allowances. American data suggest that introduction of a taxpayer check-off system, as proposed in the 2004 Conservative Party platform, would replace only a small fraction of the revenue lost by cancelling the allowances. Canadian data show that increasing donor limits would also have only a small positive impact. Cancelling the allowances will definitely constrain parties and may force them to limit campaign activities