2025 was a busy year in Canadian politics. In addition to the general federal election, elections were held in two provinces (Ontario and Newfoundland) and two of the territories (Nunavut and Yukon Territory). In addition, there were no fewer than thirteen by-elections and eleven leadership contests, for different political parties, at both the federal and provincial/territorial levels.
Whether it’s a leadership contest, a by-election, or a general election at the federal, provincial, or territorial level, votes are needed in order to win. And to run the leadership or election campaigns needed to garner those votes, candidates need an organization, volunteers, and money – a lot of money. Particularly in a general federal election, the major political parties needed to raise and spend millions of dollars, and the task of raising that money is undoubtedly made somewhat easier by the fact that a tax credit exists to help offset the out-of-pocket cost to potential donors.
Individuals who donated money to the political party or candidate of their choice during 2025 may or may not be happy with the outcome of an election or leadership contest, but no matter which registered party or candidate they donated to, donors may be able to claim a federal and a provincial or territorial tax credit for that donation when they file their returns for the 2025 tax year.
Federally, the political contribution tax credit is available with respect to funds contributed to either a registered political party or to candidates running in a federal election. Contributions can be made at any time, not just during an election campaign, as long as the donation is received by an official candidate or by a registered federal political party or association.
While the parties which currently hold seats in the House of Commons are, of course, the most well known, there were in fact 16 political parties registered and in good standing with Elections Canada at the time of the 2025 federal general election; a listing of those parties can be found on the Elections Canada website at https://www.elections.ca/content.aspx?section=ele&dir=pas/45ge/pollim&document=index&lang=e.
Contributions to any one of these registered parties, within prescribed limits, will qualify for the federal political contribution tax credit. And, where a qualifying contribution is made, an official receipt must be issued in order for the contributor to claim that tax credit.
The federal political contribution tax credit is calculated as a percentage of donations given, with the credit percentage decreasing as contributions amounts increase. The credit percentages allowed for different contribution levels are as follows:
Contribution Amount | Allowable Tax Credit |
$0.01 to $400.00 | 75 per cent of the contribution |
$400.01 to $750.00 | $300 plus 50 per cent of the contribution over $400 |
$750.01 and over | $475 plus 33.33 per cent of the contribution over $750 |
The maximum credit claimable in any taxation year by a single taxpayer is $650, meaning that the maximum credit obtainable is reached once contribution levels reach $1,275.
Unlike some other tax credit measures, the rules governing the political contribution tax credit do not permit political contributions eligible for the credit to be carried over and claimed in any previous or subsequent tax year. Consequently, all such contributions made can only be claimed on the return for the year in which those contributions were made. As well, where such contributions exceed $1,275 in any one taxation year, no tax credit can be claimed on any “excess” contributions, in either the current or any previous or subsequent tax year.
Each of the provinces and territories also provides a tax credit for political contributions made. The rules on which types of contribution are eligible for that credit, and how the credit is calculated, will differ for each jurisdiction. Information on the political contribution tax credit for the provinces and territories which held general elections in 2025 can be found on the following websites:
- Ontario https://www.ontario.ca/page/political-contribution-tax-credit-individuals;
- Newfoundland and Labrador https://www.gov.nl.ca/fin/tax-programs-incentives/personal/politicalcontributions/;
- Yukon https://www.canada.ca/en/revenue-agency/services/forms-publications/tax-packages-years/general-income-tax-benefit-package/yukon/5011-pc.html#h-4;
- Nunavut https://www.canada.ca/en/revenue-agency/services/forms-publications/tax-packages-years/general-income-tax-benefit-package/nunavut/5014-pc.html
Many Canadians who are committed to a particular political party or candidate volunteer their time during a nomination or election campaign – canvassing for the candidate, putting up election signs, or telephoning voters to encourage them to vote for the candidate. However, in such cases, the work must be its own reward, as no income tax receipts can be issued for most such non-monetary contributions, and consequently no credit can be claimed for the value of any non-monetary contribution (including volunteer hours) donated.
If you would like help with dealing with the CRA or would like to know more about taxable benefits, please feel free to call us at (905) 305-9722 or email us at info@eigenmachtcrackower.com and we will help you out!
