Principal Issues: Whether contributions to Ontario Municipal election candidates qualify as charitable contributions.
Position: No.
Reasons: Election candidates are not qualified donees. In addition, paragraph 18(1)(n) denies the deduction of political contributions.
November 8, 2018
XXXXXXXXXX
Dear XXXXXXXXXX:
The office of the Honourable Bill Morneau, Minister of Finance, sent me a copy of your correspondence about claiming a charitable deduction for contributions to an Ontario municipal election campaign. Thank you for your understanding regarding the delay of this response.
Contributions by individuals to municipal election candidates in Ontario are not tax deductible, and they do not qualify for a tax credit under either the Income Tax Act or Ontario’s Taxation Act, 2007.
Under the Income Tax Act, individual taxpayers can claim a charitable tax credit for an eligible amount of a gift made to a qualified donee. The Act defines qualified donees to include registered charities and registered municipalities in Canada, but not political parties or candidates at any level of government.
Furthermore, the Income Tax Act does not allow taxpayers to deduct political contributions when calculating their income. However, individual taxpayers may be able to claim the federal political contributions tax credit for the eligible amount of monetary contributions to a registered party, a registered association, or a candidate, as defined in the Canada Elections Act.
In addition, under Ontario’s Taxation Act, 2007, Ontario residents can claim a provincial political contribution tax credit for eligible contributions to candidates, leadership contestants, constituency associations, and parties that are registered under Ontario’s Election Finances Act. However, as noted above, municipal election candidates are not included under these provisions.
I appreciate the opportunity to respond to your concerns and trust the information I have provided is helpful.
Sincerely,
The Honourable Diane Lebouthillier
Minister of National Revenue
Sylvie Danis
613-670-9047
2018-077974