The NDP may be in even bigger trouble than we think

Behind the party’s collapse lies a financial and legal time-bomb.

Most people think the NDP’s 2025 election disaster ended on election night. It didn’t. The real fallout is still coming, and it could cripple the party for good.

Yes, the loss was brutal. The NDP won just seven seats in the federal election, not enough to maintain official party status in the House of Commons. They lost funding for the leader’s office, their research bureau, and their spots on parliamentary committees, along with most of their relevance. But the worst of it isn’t in the headlines. It’s buried in spreadsheets, legal clauses, and bank ledgers.

Here’s the real crisis: the NDP appears to be millions of dollars short on paying back its national campaign loan, and there may be no obvious way out.

Fewer than 50 of 343 NDP candidates reached the 10 percent vote threshold needed to qualify for a campaign expense rebate from Elections Canada. That’s not just an embarrassing stat, it’s financial ruin. Those rebates, worth several million dollars collectively, are normally how the NDP repays its election loan. No rebates means no repayment.

Now let’s add up the risk. The NDP supposedly ran a fully-funded national campaign. (I say supposedly because it’s hard to believe they spent that much and got so little in return.) Their legal spending cap was roughly $35.8 million. Several insiders say the party borrowed close to the max, or at least enough to require those rebates to service the debt. With only about 15 percent of ridings qualifying, the NDP’s repayment plan has collapsed.

And no, Elections Canada won’t cut them slack. This is an agency that enforces the law to the letter, and the stakes here are high.

If the NDP can’t repay its loan within three years, under the Canada Elections Act, that unpaid balance can be deemed a political contribution. That’s where things go from bad to existential.

Because:

• Banks can’t legally contribute to political parties.

• Individuals are capped at around $1,775 annually.

This is where the real danger kicks in. If a campaign loan isn’t repaid on time, Elections Canada can declare it a political contribution. But political parties aren’t allowed to receive multi-million-dollar gifts - not from banks (oh, the irony!), and not from individuals. So what should have been a repayable loan becomes an illegal donation, triggering serious compliance violations, possible enforcement orders, and major fines. It’s not just a headache. It’s a legal and financial time-bomb.

Let me be clear. This isn’t speculation. It’s spelled out in the Act. And I’ve seen how Elections Canada treats even the smallest violations.

Back in the mid-2000s, a Conservative volunteer out west served as a financial agent for a local candidate. After one of the elections, he properly emptied the campaign account but didn’t close it right away. He was still dealing with the audit. Then a snap election was called. Rather than opening a new account, he reused the old one. Same riding, same candidate, same party. Harmless, right?

Nope. Under the Act, you’re required to close and reopen the account for every election. Elections Canada had him charged with a criminal offence. He fought it in court and lost - all for reusing an empty campaign account. He was convicted, but ultimately granted an absolute discharge.

That’s the kind of rigidity we’re dealing with.

And now the NDP is facing a much more serious situation, with millions in debt, no clear path to repayment, and no institutional margin for error.

It gets worse.

The party’s base is revolting. Reclaim Canada’s NDP, a grassroots group within the party unhappy with how the central team managed things, is now calling on supporters to cancel their donations to the federal party and instead send money directly to riding associations. Their logic is simple: the central party is too dysfunctional to trust, so the only path forward is to rebuild from the ground up. It’s not a whisper campaign. It’s a public, organized rebellion. And if they succeed, they may be unwittingly killing the actual party they wish to save.

Meanwhile, the party’s most valuable asset, the Jack Layton Building, its national HQ in Ottawa, is potentially in play. The building has been used to secure loans in the past. If the party defaults, it may have to sell it. The symbolism of losing the home named after their most successful leader would be devastating, but it may also be necessary just to survive.

This is the kind of structural collapse that ends political parties. It’s happening in slow motion - and almost no one in Ottawa seems to be paying attention.

Maybe that’s no surprise. It’s the NDP, a party many already view as a sideshow. So even a multi-million-dollar compliance crisis can quietly slip under the radar.

But just because no one’s watching doesn’t make the problem any less real. The NDP didn’t just bleed support. It bled cash, internal cohesion, and institutional stability. And unless something changes fast, they won’t just be a smaller party in the House. They might not be a party at all.

If the NDP can’t rebuild, repay, and re-emerge, Canada may be headed for a prolonged two-party system. And that would truly change everything.