PEI·Analysis

How might new limits on donations affect P.E.I. politics?

On June 12 new rules came into effect on P.E.I. regarding political donations. Corporate and union donations are now prohibited, while individuals are limited to $3,000 per year in support of each registered party.

Liberals say fundraising not likely to take a hit, while Greens say change was long overdue

P.E.I. placed annual limits of $3,000 on political donations as of June 12, leaving Saskatchewan and Newfoundland and Labrador as the only remaining provinces with limits on contributions. (CBC)

It was a promise made, then partially recanted, and finally kept.

On June 12 the P.E.I government brought into effect new rules regarding the way Island political parties are able to raise money.

It's still an undemocratic system.— Duff Conacher

For the first time, there are annual limits on how much money Island residents can donate to political parties — $3,000 per party. And from now on, donations from corporations, unions and from out-of-province are prohibited.

The changes move P.E.I. from what's sometimes been described as a lawless "wild west" of political fundraising to being closer in line with most other provinces and with federal rules.

But what impact will the changes have on party fundraising — both how it's done and how much money each party is able to raise?

No 'significant changes,' say Liberals

The P.E.I. Liberal Party — which for years has been raising more money than all the other other parties combined — said even with an end to corporate donations, it doesn't expect to see a dip in its totals.

"We don't anticipate there's going to need to be significant changes," in fundraising practices said party president Scott Barry. 

"Certainly a good chunk of our fundraising has been associated with corporate donations in the past. [But] there's people behind corporations, and there's actual people that show up to our fundraising dinners," Barry said.

2017 Total Contributions Corporate / Union Donations over $250 Corporate % of total
Liberal $ 362,209.45 $ 219,188.52 60.5
PC $ 203,017.98  $ 95,122.67 46.9
Green $ 43,634.88  0 0.0
NDP $ 23,300 $ 4,000 17.2

source: Elections P.E.I.

In other words, corporations can no longer donate to political parties, but the people who own them or work for them still can.

Barry said the challenge for his party will be one of messaging — ensuring the business person who's the point of contact for a party volunteer selling tickets to a fundraiser understands that they have to be paid for with "a personal cheque rather than any corporate cheque."

As Barry points out, typically only a small number of donors have exceeded the new $3,000 limit. For the Liberals, there were 11 donors in 2017 who contributed more than the limit. For the PCs, there were three. Neither the Greens nor NDP had a single donation of more than $3,000 in 2017.

The prohibition against out-of-province donations of more than $250 will have a bigger impact on party finances than any other new measure, according to 2017 figures.

Out-of-Province Contributions Over $250 (2017)
Liberal $ 32,964.81
PC  $ 6,452.16
Green $ 700
NDP $ 4,300
All Parties $ 44,416.97

source: Elections P.E.I.

Green Party leader Bevan-Baker said allowing for "limitless" contributions, be they from individuals, corporations or unions, created "the possibility, whether it's real or perceived, for them to influence government policy."

"The sectors of society that tend to make the big donations are those that tend to get the big government contract," he said, referencing the construction, legal and telecommunications industries.

Limits too high, says Democracy Watch

While crediting government with bringing in limits, Bevan-Baker said it remains to be seen whether the current limits are low enough to remove the possibility for big money to influence Island politics.

Democracy Watch co-founder Duff Conacher said he doesn't have to wait to come up with an answer to that question.

With the exception of Quebec, where the limit on donations is $100, all provinces have caps which are too high, he said.

"Only wealthy people can afford $3,000 as an annual donation," he said. "It's still an undemocratic system."

In fact, P.E.I.'s legislation allows the contribution limit to increase annually by $50.

The changes passed during the spring sitting of the legislature also increase the amount of taxpayer-funded compensation election candidates are able to receive to offset campaign expenses.

Those changes also stipulate that no donations to parties can be made anonymously. Elections PEI says while parties will record the names of all donors, the agency says it will continue its current practice of only publishing the names of those who contribute more than $250 per year.

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About the Author

Kerry Campbell

Provincial Affairs Reporter

Kerry Campbell is the provincial affairs reporter for CBC P.E.I., covering politics and the provincial legislature. kerry.campbell@cbc.ca