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Tax Deductibility of Municipal Campaign Contributions

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Resolution Category: 
C.i.3
Subject: 
Year: 
2009
Status: 
Adopted
Active Clauses: 

NOW THEREFORE BE IT RESOLVED THAT the Alberta Urban Municipalities Association urge the Government of Alberta to enable acknowledgement of contributions to local government candidates by tax deductions or tax credits through appropriate amendments to the Alberta Income Tax Act and the Local Authorities Election Act.

Whereas Clauses: 

WHEREAS the costs of campaigning for municipal elected office continue to increase;

WHEREAS registered parties and candidates for elected office for provincial and federal legislatures have the ability to attract contributions by noting the tax benefits available to potential donors;

WHEREAS the absence of the ability to offer tax advantages to potential donors puts candidates for municipal office at a comparative fundraising disadvantage to candidates for the other two orders of government;

WHEREAS the ability to realize a tax benefit from making a contribution to local candidates may encourage greater financial participation in the democratic process on the part of local voters; and

WHEREAS the ability to grant a tax benefit to a contributor will increase accountability and transparency in the political process.

Government Response: 

May 31, 2010 - Alberta Finance and Enterprise 

Calls on the Government of Alberta to provide tax credits for contributions made to local government candidates. Considering the current fiscal challenges facing Alberta, I will not be supporting this resolution. An alternative form of funding could be considered, such as municipally funded political tax credits deducted against municipal taxes. This is similar to what occurs in Manitoba and Ontario.

The current fiscal environment poses considerable challenges for Alberta. We are forecasting deficits of $4.7 billion for 2010/2011 and $1.1 billion for 2011/2012, before returning to surplus in 2012/2013. Support for municipalities continues to be a priority. However, these challenges have required us to ask all our partners, including municipalities, to make some sacrifices to meet our goal of surplus by fiscal year 2012/2013. 

Jun 25, 2010 - Municipal Affairs

Municipal Affairs acknowledges that, unlike provincial and federal campaign donations, municipal and school board campaign contributions are not tax deductible. The appropriate provisions regarding tax deductions are addressed under the Alberta Income Tax Act, which is out of the scope of the Local Authorities Election Act and the authority of Municipal Affairs.

AUMA Notes: 

AUMA accepts this response; however, we will seek to have this issue addressed as the economy recovers.