Government Introduces Political Finance Reform Legislation

The provincial government has introduced legislation to change the way Nova Scotia political parties are financed.

Under amendments to the Members and Public Employees Disclosure Act, political donations will be subject to an annual maximum of $5,000 per party and political parties will get an annual grant tied to votes they receive in provincial elections.

"These are fundamental, positive changes for our democratic system in Nova Scotia," said Michael Baker, Minister responsible for the Elections Act. "We believe they will immediately improve the transparency and accountability of the electoral system, while at the same time promoting grassroots participation."

The legislation means that political parties cannot depend on large donations from any one person or organization, including private corporations and unions. Only residents of Nova Scotia can make donations, and donors exceeding the limit may be subject to a fine.

Recognized political parties will receive annual public financing of $1.50 for each vote. During the transition to the new system, over the next two years, parties have the option of taking 90 cents per vote and a lump sum payment of $125,000 each.

All four recognized political parties will receive payments in 2007, expected to total $745,000. One quarter of the amount will be paid in the 2006-07 fiscal year.

In addition to the contribution limits, the legislation contains numerous restrictions related to other sources of political financing, such as loans and trust funds.

The bill includes changes to the Income Tax Act that will adjust the tax credits for political donations. Smaller donations -- under $1,000 -- will be encouraged by a 75 per cent tax credit.

Nova Scotia’s proposed legislation is similar to reforms introduced at the federal level and in other provinces, including Manitoba, New Brunswick and P.E.I.