Political Financing Handbook for Candidates and Official Agents (EC 20155) – February 2018
This chapter defines what is and is not a contribution, explains the rules for administering contributions and provides practical examples. It covers the following topics:
- What is a contribution?
- What is commercial value?
- Who can contribute to whom and how much?
- Are paid leave, volunteer labour, sponsorship or advertising contributions?
- What are the rules for contribution receipts, anonymous contributions and ineligible contributions?
What is a contribution?
A contribution is donated money (monetary contribution) or donated property or services (non-monetary contribution).
|Monetary contribution||Non-monetary contribution|
|A monetary contribution is an amount of money provided that is not repayable.
Monetary contributions include cash, cheques or money orders, credit card or debit card payments, and contributions made using online payment services.
|The amount of a non-monetary contribution is the commercial value of a service (other than volunteer labour) or of property, or the use of property or money, to the extent that it is provided without charge or at less than commercial value. This includes forgone interest on loans.|
What is commercial value?
Non-monetary contributions are recorded at commercial value. Commercial value, in relation to property or a service, is the lowest amount charged at the time that it was provided for the same kind and quantity of property or service, or for the same use of property or money, by:
- the person who provided the property or service (if the person who provided it is in that business), or
- another person who provides that property or service on a commercial basis in the area (if the person who provided the property or service is not in that business)
Note: If the commercial value of a non-monetary contribution is $200 or less, and it is from an individual not in that business, the contribution amount is deemed to be nil.
- An individual who is not in the business of renting office supplies lends a photocopier to the campaign office for the duration of the campaign. The official agent has to determine the commercial value of this non-monetary contribution by checking with local suppliers to see how much they would charge for renting similar equipment for the same period. If that amount is greater than $200, a non-monetary contribution must be reported.
- A self-employed individual in the business of providing information technology services offers to set up the computers in the campaign office and does not charge for the service. This is a non-monetary contribution from that person. The commercial value is equal to the lowest amount charged by that individual for the same kind of service.
Who can contribute?
Only individuals who are Canadian citizens or permanent residents of Canada can make a contribution to a registered party, a registered association, a candidate, a leadership contestant or a nomination contestant.
Contributions can be accepted from minors, but political entities should consider whether the person is contributing willingly and using their own property or money.
Any money that is used for the campaign out of the candidate's own funds is a contribution. If the candidate obtains a loan from a financial institution for the purpose of making a contribution to their own campaign, the loan must be guaranteed by the personal property of the candidate.
Note: Corporations, trade unions, associations and groups cannot make contributions.
Limits on contributions, loans and loan guarantees to a candidate
This table displays the limits for candidates. The limits for all entities are available in Chapter 1, Reference Tables and Timelines.
|Political entity||2018 annual limit||Limit per election called between Jan. 1 and Dec. 31, 2018|
|In total to all the registered associations, nomination contestants and candidates of each registered party||$1,575*||n/a|
|To each independent candidate||n/a||$1,575*|
- The contribution limits apply to total contributions, the unpaid balance of loans made during the contribution period, and the amount of any loan guarantees made during the contribution period that an individual is still liable for.
- The sum of these three amounts cannot at any time exceed the contribution limit.
There are some exceptions to the limits on contributions:
- A candidate is permitted to give a total of $5,000 in contributions, loans and loan guarantees to their campaign.
- A candidate is also permitted to give an additional $1,575* in total per year in contributions, loans and loan guarantees to other candidates, registered associations and nomination contestants of each party. (This includes contributions to the registered association in the candidate's electoral district and contributions to the candidate's own nomination campaign.)
*The limits increase by $25 on January 1 in each subsequent year.
- Max decides to contribute $1,575 to the registered party he supports. In addition, he makes a $550 contribution to the party's registered association in his riding. When a federal election is called in the same year, he makes a $1,000 contribution to the candidate representing the party in his riding. With that, Max reaches the annual limit for contributions to the registered party as well as the annual limit for contributions to any combination of candidates, registered associations and nomination contestants of the registered party. He could still make a contribution to political entities of other registered parties.
- Clara made a $1,575 contribution in her riding to the registered association of the party she supports. Later that year an election is called and Clara makes a $1,575 contribution to the candidate representing the party in her riding. The official agent of the candidate, however, is aware of the contribution made to the association and returns the cheque to Clara because, with the earlier contribution, she has reached her annual limit.
Note: It is important that financial agents of electoral district associations and nomination contestants, and official agents of candidates, communicate about contributions, loans and loan guarantees because the yearly contribution limit applies to the total amount of these.
- Peter gave a $1,575 loan to a candidate in his riding early in the year. The full amount is still outstanding on December 31. Consequently, Peter could not have made another loan, contribution or loan guarantee that year to a candidate, registered association or nomination contestant of the same party. The sum of contributions, loans and loan guarantees cannot at any time exceed the contribution limit.
Note: These examples use the limits in effect for 2018.
Paid leave for a candidate is not a contribution
An employer can give an employee a paid leave of absence during an election period to allow the person to be a nomination contestant or a candidate. The paid leave is not a contribution.
A paid leave of absence for anyone other than a nomination contestant or a candidate is a contribution.
Volunteer labour is not a contribution
Campaigns often rely on the help of volunteers. Volunteer labour is any service provided free of charge by a person outside of their working hours. Volunteer labour is not a contribution.
Note: A service provided by a self-employed person who normally charges a fee for that service is a non-monetary contribution and is not volunteer labour. The person providing the service has to be eligible under the contribution rules.
- A person who is employed as a teacher offers to work in the evenings in the campaign office to answer the phone and help with general office duties. This is volunteer labour and therefore is not a contribution.
- A self-employed graphic designer offers to design a pamphlet for the candidate free of charge. Because the person is self-employed and normally charges for that service, the pamphlet design is not volunteer labour. The commercial value of the service has to be recorded as a non-monetary contribution. In this case, the commercial value is the lowest amount the graphic designer normally charges for that service.
Sponsorship or advertising at a political event is a contribution
A transaction involving the receipt of money by a political entity in exchange for advertising or promotional opportunities directed at members or supporters of the political entity is not recognized as a commercial transaction. Any money received as part of such an arrangement is to be treated as a contribution that is subject to the contribution limit and eligibility rules.
The candidate's campaign holds a golf tournament as a fundraiser. The campaign encourages individuals to sponsor a hole: for $200, they can have their names printed on a small sign attached to the flag pole. The full amount paid by each individual is a contribution to the candidate. The campaign does not ask corporations or unions to sponsor a hole because only individuals can make contributions.
Accepting and recording contributions
Only the official agent can accept contributions to the candidate's campaign.
|Contribution||What to do|
|Anonymous contributions||Anonymous contributions of $20 or less can be accepted.|
|Contributions over $20 and up to $200||The contributor's full first and last name have to be recorded (initials are not acceptable), and a contribution receipt must be issued. To issue a tax receipt, the official agent has to record the contributor's address as well.|
|Contributions over $200||The contributor's full first and last name (initials are not acceptable) and address have to be recorded, and a contribution receipt must be issued.|
This table summarizes some important points about accepting contributions and issuing receipts.
|Contribution received||What to keep in mind|
|Cheque from a joint bank account||
|Before candidate's nomination is confirmed||
|Through an online payment service||
|From a partnership||
|From an unincorporated sole proprietor||
Note: It is recommended that campaigns only accept contributions made by way of a traceable instrument.
Issuing contribution receipts
A receipt has to be issued for each monetary or non-monetary contribution over $20. Only the official agent can provide official receipts for contributions, including tax receipts.
Tax receipts can be issued only for monetary contributions received within a specified period. The period starts from the day on which the candidate's nomination has been confirmed by the returning officer. It ends on the day that is one month after election day. Under Canada Revenue Agency rules, contributions received after election day must have been in transit on election day to be eligible for a tax receipt (see their information circular IC75-2R9).
Tax receipts have to be issued on prescribed forms, either paper or electronic.
Paper tax receipts are available from Elections Canada. It is important to keep in mind that if the official agent requests paper tax receipts, these must all be returned (copies of used pages, plus unused and cancelled receipts) to Elections Canada no later than one month after election day.
Alternatively, the official agent may use Elections Canada's Electronic Financial Return (EFR) software to issue all receipts. It is easy to use and makes paper tax receipts from Elections Canada unnecessary. Please refer to the EFR User Guide for more information. The guide can be found under the Help menu within the EFR software. EFR is free and downloadable from the Elections Canada website.
Clara contributed $300 to Peter, who announced that he would be running as a candidate in the next election. Once Peter's nomination was confirmed, Clara made another contribution of $500. Clara will receive a tax receipt for $500, although the total amount she contributed was $800. She must receive an official receipt (not valid for tax purposes) for the other $300.
Determining the date a contribution is made
As most contribution limits apply per calendar year, the date a contribution is made is important. It is also important for reporting purposes because this same date will be used as the "date received" in the candidate's return.
The date a contribution is made is generally the date the contribution is in the hands of the official agent. There are exceptions for contributions made by regular mail, by post-dated cheque and electronically.
|How contribution is made||Date contribution is made|
|In person||The date the contribution is in the hands of the candidate's official agent.|
|By regular mail||The date of the postmark on the envelope. If the postmark is not legible, the contribution is made on the date the agent receives the mail. The campaign should keep the stamped envelope as part of its records.|
|Post-dated cheque by any means||The date on the cheque.|
|Electronically (e-transfer, credit card, PayPal, etc.)||The date the contributor initiates the transaction. If the transaction is post-dated, the contribution is made on the date specified by the contributor.|
- On December 23, 2017, an individual goes to the campaign office and gives a cheque in the amount of $300, dated for the previous day. The official agent deposits the cheque on January 10, 2018. The contribution is made on December 23, 2017. The official agent issues a receipt for 2017, and the amount counts toward the individual's 2017 contribution limit.
- An individual makes an e-transfer to the candidate's campaign on December 23, 2017, but the official agent does not process the amount until January 10, 2018. The contribution is made on December 23, 2017. The official agent issues a receipt for 2017, and the amount counts toward the individual's 2017 contribution limit.
- The official agent receives a cheque from a contributor in the mail on January 5, 2018. The cheque is dated December 28, 2017, and the postmark on the envelope is December 30, 2017. The contribution is made on December 30, 2017. The official agent issues a receipt for 2017, and the amount counts toward the individual's 2017 contribution limit.
- The official agent receives a cheque from an individual during the election period and deposits it in the campaign bank account. A few days later, when checking the account online, the official agent notices that the bank has charged the account a fee because the cheque did not have sufficient funds. No contribution has been made and the bank charge is an election expense. If the contributor issues a new cheque later, the contribution is made on the date associated with the new contribution.
Recording anonymous contributions
If anonymous contributions of $20 or less are collected during an event related to the campaign, the official agent has to record:
- a description of the function at which the contributions were collected
- the date of the function
- the approximate number of people at the function
- the total amount of anonymous contributions accepted
Anonymous contributions of $20 or less may also be received outside the context of a particular function. In that case, the official agent has to keep track of the total amount collected plus the number of contributors.
Campaign volunteers organize a wine and cheese event one evening in the campaign office, and invite local residents. Approximately 40 people show up. During the evening, the campaign manager passes a basket around to collect cash contributions from the attendees. She informs the guests about the contribution rules: a maximum of $20 can be accepted from any one individual as an anonymous cash contribution. At the end of the evening there is $326 in the basket.
After the event the official agent has to record the following: a description and the date of the event, the approximate number of people who attended (40), and the amount collected in anonymous contributions ($326). The official agent has to deposit the amount into the campaign bank account.
Remitting anonymous contributions that cannot be accepted
If the campaign receives a contribution that is:
- over $20 and the name of the contributor is not known, or
- over $200 and the name and address of the contributor are not known
the official agent has to send a cheque for the amount without delay to Elections Canada, payable to the Receiver General for Canada.
The official agent is responsible for ensuring that contributions are in accordance with the rules set out in the Canada Elections Act.
The following contributions are ineligible:
- cash contributions over $20
- contributions from corporations, trade unions, associations and groups
- contributions that exceed the limit
- indirect contributions (no individual can make a contribution that comes from the money, property or services of another person or entity)
- contributions from an individual who is not a Canadian citizen or a permanent resident
- contributions an individual makes as part of an agreement to sell goods or services, directly or indirectly, to a registered party or a candidate (for example, a candidate cannot agree to buy campaign signs from a local dealer in exchange for a contribution)
Returning or remitting ineligible contributions
The official agent must not knowingly accept a contribution that exceeds the limit. It is also advisable not to accept any other type of ineligible contribution.
The official agent has to return or remit a contribution within 30 days of becoming aware that it is ineligible. It must be returned to the contributor or remitted to Elections Canada, based on whether or not the contribution was used.
A monetary contribution is considered used if the campaign bank account balance fell below the ineligible amount at any time after the contribution was deposited into the bank account.
Flowchart 1 explains how to administer ineligible contributions in different scenarios.
- The official agent deposits a cheque for $600 from a contributor. When he enters the contribution in the books, he notices that the same person has already contributed $1,000 to the candidate's campaign. Within 30 days, assuming the money has not been spent, the official agent has to issue a cheque for the excess amount, $25, and send it to the contributor. He records a returned contribution of $25.
- The official agent receives a cheque for $2,000 from a contributor. As this is obviously an over contribution, the official agent cannot deposit the cheque. She sends it back to the contributor uncashed, and no reporting is required.
- An individual makes a non-monetary contribution to the campaign by offering the use of office space. The official agent later realizes that the commercial value of renting the same office is $1,700, which is higher than the contribution limit. The office has been used during the campaign, so he sends a cheque for the excess amount of $125 to Elections Canada, payable to the Receiver General for Canada. He records a contribution of $1,700, a returned contribution of $125 and an expense of $1,700.
- The official agent receives a notice from Elections Canada a couple of months after election day. It states that a person who contributed $900 to both the registered association and the candidate exceeded the annual limit by $225 with the contribution to the candidate. Since the deposit date of the contribution, the campaign bank account balance had fallen below the ineligible amount of $225 and the funds were therefore used. The official agent must remit $225 within 30 days of becoming aware of the contravention. To obtain funds, she could organize a fundraising event or request that the registered association or the party repay the $225 on the candidateís behalf. Once the money is available, the official agent sends a cheque for the excess amount to Elections Canada, payable to the Receiver General for Canada. She records a returned contribution of $225.
Note: These examples use the limits in effect for 2018.
Flowchart 1: Returning or remitting ineligible contributions
*A monetary contribution was used if the campaign bank account balance fell below the ineligible amount at any time after the contribution was deposited into the bank account.
**For example, the contributorís address is known and there are no obstacles to prevent the return.