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Opinion: Of course, campaign donations for Kennedy Stewart cannot be claimed on your tax return

Political donations for municipal candidates and parties in B.C. are not – and have never been – eligible for tax credits… because there isn’t a municipal tax that can simply be deducted.
Vancouver residents might want to make contributions to campaign efforts for mayoral hopefuls, but those donations aren't tax-deductible like their federal counterparts.

Political fundraising for Vancouver’s municipal election is seemingly well underway.

Vancouver Mayor Kennedy Stewart is doing it. Ken Sim, who barely lost the mayorship to Stewart in 2018, is doing it. A political operative is doing it, presumably hoping for better electoral results than last time when his candidate ran a fifth-place Vancouver mayoral campaign despite being gifted expensive billboards. Even Vision Vancouver is doing it.

Fresh off urgent pleas for year-end donations last month, municipal politicians across British Columbia, but especially in Vancouver, will be soliciting the public for money through 2022 up until civic elections on October 15. 

However, unlike donations made to provincial or federal political campaigns, donations to municipal campaigns are not eligible for tax credits. Donations to registered provincial politicians and parties are eligible for tax credits up to $550, whereas donations to registered federal politicians and parties are eligible for tax credits up to $650.

But even the maximum possible contribution to Kennedy Stewart, the NPA, Gölök Buday, or any municipal campaign returns nothing to the donor in their tax filing.

The reason is straightforward. 

Municipalities are an order of government that are completely different from provincial or federal governments: Municipalities do not collect income tax. 

Provincial and federal governments utilize income taxes as a mechanism to issue tax credits for political donations. Political donations can be partially refunded in the form of tax credits when filing tax returns. The purpose of these tax credits is to encourage democratic participation, although it probably has more to do with massively subsidizing donations to provincial and federal political parties.

Municipalities, in contrast, only have taxing authority in the form of property taxes, which do not apply to everyone. For example, a renter in the West End would have no means to claim a tax credit with the City of Vancouver for a donation to independent City Councillor Rebecca Bligh’s re-election campaign.

Further complicating matters, municipal parties and politicians can accept donations from B.C. residents outside of their municipality. For example, a Richmond resident can donate to COPE Vancouver, but they would have no way to claim a tax credit from the City of Vancouver since they do not pay taxes to the City of Vancouver.

Essentially, municipalities have no way to issue tax credits for political contributions.

Alternatively, the Government of British Columbia could extend tax credits to municipal election campaigns, paying for these tax credits out of the province’s own budget. However, there is no particular incentive for the province to do this, as much as the Union of B.C. Municipalities may have lobbied for something like this in the past.

Even if Vancouverites (or British Columbians) demanded tax credits for municipal campaign donations, it would be a bureaucratic mess to implement. The required level of detail would be far more complicated than provincial or federal campaigns, considering the thousands of candidates – many without a party – across B.C.’s local elections.

So while this lack of a tax credit may induce sticker shock for donors (especially first-time donors) to Vancouver election campaigns, the reality is simple: It is virtually impossible to provide tax credits for political contributions to local B.C. elections.

Mo Amir is the host of This is VANCOLOUR, Vancouver’s bona fide culture and politics podcast, now also airing on Sundays at 7 p.m. on CHEK.