Economics 101: Why Business Donors Are So Happy With Canada

Canada has long had a reputation as a kind of dumping ground for cash from the United States. Over the last decade, according to The Wall Street Journal, many U.S. business and political donors have chosen to send their money to the relatively wealthy province of British Columbia, in order to avoid taxes and influence the government.

Such activity has been legally encouraged by B.C.’s Campaign Finance Act. The law enables political party to hold secretive bank accounts (called a political endowment) and collect donations up to $30,000 per individual, despite restrictions on political spending. And while the law was largely designed to facilitate grass-roots democracy, its effect has been to allow people with deep pockets to buy influence. (It is currently being investigated by an ethics watchdog.)

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