Fees When Donating Online to Canadian Political Parties

I just finished watching The Ides of March on Netflix Canada and I got in the mood to make a donation to a political party. Since I haven't waited until the last minute this year, I thought about sending a check so that none of my donation gets eaten up by merchant credit card fees (2.5 to 10%). Because of the tax credits, if you want to give $100, you give $400, to give $200 you need to give $600. Since 4% of $600 is $24, approximately 12% of a net (post tax credit) donation of $200 would go to the credit card processor.

But then I thought of the logistics involved in sending a check (finding my stamps and the envelopes that don't have the evaporated glue), and I realised sending a cheque was unlikely. Plus processing a cheque on the receiving end isn't free either. Someone has to open the envelope and enter data into a computer.

Thankfully, the NDP has a solution: eChecks. I did some reasearch and at worse, the NDP will pay 1% of my donation as a fee. More likely, the fee will be limited to less than $5. For me, that's the way to go. At most it will cost me 65 cents, and that is only if I'm over my 10 transaction per month limit on my $3.95 a month bank account. I won't get my 1% in donuts back that I would using my DoubleDouble CIBC credit card, but that is a sacrifice I am willing to make so that Trudeau or Harper don't win the next election.

By the way, you will need a routing number: 0XXXYYYYY (X= Bank number, Y= branch number). You can look it up if that explanation was too complicated.

The Liberals don't accept eChecks. They accept Paypal. That dramatically increases the fee to 1.9% (plus 30 cents), but at least it is cheaper for the party than credit cards.

The Conservatives? The Conservatives don't accept echeques or Paypal, but they do accept American Express. Amex has the highest merchant fees. At a minimum, 3.5% (probably more for Internet transactions). 

Hmm, I just realised that at the bottom of the NDP donation page, there is a link to "contribute via your bank account" and then you have the option to use Interact Online. My bank charges me $1.50 to use Interact Online, but as far as I know that is the cheapest method for the merchant. I'm not sure why they kind of hide that option, although perhaps it is because you can only use Interact Online if you use online banking with:

-BMO Bank of Montreal

-Envision Financial

-Libro Credit Union

-Scotiabank

-TD Canada Trust

-RBC Royal Bank

(So no CIBC, National, Laurentian or Desjardins.)

Neither the Conservatives nor the Liberals accept Interact Online. By the way, Permanent Residents can't vote, but they can donate. 

Jurisdiction and the TTC

The rules of federalism don't always make sense. John A. Macdonald wasn't a fan.

But it is what it is and we have it. If you want to mess with it, Toronto, and have the federal government pay for bus drivers and potholes, than here is what we could also change.

-Duty on foreign made cars. In Canada, new cars are only made in Ontario. Why should the rest of the country pay duty on non-Ontario made cars? That's a giant subsidy of Ontario, at the expense of poorer Canadians in the rest of the country. Is there a duty on foreign fish? Foreign oil? Foreign paper? Foreign lumber? No. 

-Capital gains on homes. If you make a million dollars on your home, you don't pay a cent in federal tax. How is that fair? That is a giant subsidy to the people of the Toronto area and, lately, Ottawa. You know where homes are not increasing in value? Rural Canada, and that includes most of the Maritimes.

-GST on financial transactions. Many banks charge $10 a month for a checking account. Others charge 65 cents per transaction. Not a penny is paid in GST. There is GST on a sandwich, but not on financial transactions. That's a giant gift to the banking industry, you guessed it, based in Toronto.

-Why is the banking industry based in Toronto? Does it need to be federally regulated? Credit unions under provincial jurisdiction seem to be doing OK. So do provincially regulated insurance companies. Banking in the USA is under state jurisdiction. I'm not saying the industry would necessarily be better, but it would spread the wealth to non-Toronto cities, and that is a good thing.

-Federal jobs in Toronto and Ottawa. In the age of the Internet, does it really make sense to have all those federal jobs concentrated in expensive cities? In Ottawa-Gatineau it is even more absurd. Move the jobs across the river, save on rent, and workers that follow their job to the Quebec side would pay their income and sales tax to the government of Quebec, reducing federal transfer payments. Very few federal jobs need to be in Toronto. There is no reason for the CBC, for example, to have their HQ there. Move it to Hamilton, Montreal, Halifax, Winnipeg. Just not expensive Toronto!

-International flights to Toronto. Any European airline can fly to any city in Canada, but they can't make stopovers and pick-up passengers en-route. Worse, countries that don't have agreements with Canada can inexplicably fly accross half of Canada's airspace and land in the most lucrative market (Toronto) without serving the rest of the country. Make them land in Quebec City, Halifax, St. John's, Yellowknife, Iqaluit. 

Asking for federal funds is very shortsighted. Wealth might be concentrated in Toronto, but voters are not. In addition to all those non-citizens in Toronto who can't vote, Canada is a big country and the vast majority of Canadian don't live in Toronto. Hence, getting federal funding for transit is giving power to politicians in Moncton and Moosejaw. Power to literally decide the location of streetcar lines and the frequency of bus routes. That strikes me as not good. Worse, Torontonians, on average, have higher incomes than most Canadians. Since many cities have pot holes and city busses, asking the federal government to contribute 33% is the equivalent of asking the federal government to increase taxes. And basic math dictates that rich people spend more in tax than they get back in public services. The federal government spends, Toronto loses.

Both Montreal and Vancouver have local gas taxes. The city of Toronto has the power to impose tolls. Many cities have a hotel tax. London, UK, has vastly more expensive transit with zone fares. The Toronto Maple Leafs suck. But the solution isn't to change the rules of hockey.