Political Financing Handbook for Candidates and Official Agents (EC 20155) – February 2018
7. Electoral Campaign Expenses
This chapter takes a broad look at electoral campaign expenses and how they are administered. It covers the following topics:
- What are electoral campaign expenses?
- How do they relate to non-monetary contributions and transfers?
- Who can incur and pay electoral campaign expenses?
- What invoices have to be kept?
Note: The official agent is responsible for recording electoral campaign expenses and keeping receipts and invoices, as required by the Canada Elections Act. All supporting documentation will have to be submitted to Elections Canada with the Candidate's Electoral Campaign Return.
What are electoral campaign expenses?
The Canada Elections Act defines an electoral campaign expense of a candidate as an expense reasonably incurred as an incidence of the election.
There are three categories of electoral campaign expenses:
- election expenses
- candidate's personal expenses
- other electoral campaign expenses
It is important to understand the differences between the expense categories and the way each is administered. The next three chapters provide details on each category.
Electoral Campaign Expenses
What qualifies as an electoral campaign expense?
Electoral campaign expenses include:
- amounts paid
- liabilities incurred
- the commercial value of donated property and services (other than volunteer labour)
- the difference between an amount paid or liability incurred and the commercial value of the property or services (when they are provided at less than their commercial value)
The amount charged to the campaign is an electoral campaign expense. Generally this amount is the commercial value of the property or service received.
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)
- 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)
In other words, commercial value is generally the amount charged in a store for an item or a service.
- The campaign rents office furniture from an office equipment rental company for four months. The amount charged for the rental is the commercial value, and it is an electoral campaign expense.
- A self-employed web designer offers to design the candidate's website for a discounted price. He charges $400 instead of his regular fee of $700. The commercial value, which is the amount the web designer normally charges for his work (in this case $700), is an electoral campaign expense. The difference between the commercial value and the actual amount paid ($300) is a non-monetary contribution from the web designer.
Non-monetary contributions and transfers are also expenses
The candidate's campaign incurs an electoral campaign expense when it accepts a non-monetary contribution or a non-monetary transfer.
Keep in mind that if a service is provided free of charge by an eligible volunteer, there is no contribution and no expense. See Volunteer labour is not a contribution in Chapter 2, Contributions, for details.
|Received from an individual at no charge||The full commercial value is a non-monetary contribution.*|
|Purchased from an individual for less than commercial value||The difference between the purchase price and the commercial value is a non-monetary contribution.*|
|Received from an affiliated political entity at no charge||The full commercial value is a non-monetary transfer.**|
|Purchased from an affiliated political entity for less than commercial value||The difference between the purchase price and the commercial value is a non-monetary transfer.**|
The full commercial value of the property or service is an electoral campaign expense.
*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 is deemed to be nil and no expense has to be reported.
**All non-monetary transfers provided by the registered party or a registered association must be reported, regardless of commercial value.
- After the election is called, an individual donates office supplies—packages of paper, ink cartridges and binders—to the campaign. Buying the same items in the local stationery store would cost $300; therefore, this is the commercial value of the donated goods. The official agent has to record the following: $300 as a non-monetary contribution from the individual and $300 as an election expense.
- The official agent accepts pamphlets from the registered party. The pamphlets are distributed during the election period. The party pays $2,000 for the pamphlets and provides the official agent with copies of the relevant third party supplier invoices. The official agent has to record the following: a non-monetary transfer of $2,000 from the registered party and an election expense of $2,000.
Who can incur expenses?
Only the official agent, the candidate or a person authorized in writing by the official agent can incur electoral campaign expenses.
Who can pay expenses?
Only the official agent can pay electoral campaign expenses. There are two exceptions to this rule:
- Personal expenses of the candidate can be paid by the candidate.
- Expenses from the petty cash can be paid by a person authorized in writing by the official agent. (The official agent must set the maximum amount that may be paid from the petty cash.)
Note: A registered agent of a registered party can also incur or pay expenses for the election campaign of the leader of the registered party.
Incurring and paying the candidate's personal expenses
Only the candidate, the official agent or a person authorized in writing by the official agent can incur a candidate's personal expense.
Only the candidate or their official agent is allowed to pay the candidate's personal expenses. The candidate can pay them using their own funds, or the official agent can pay the candidate's personal expenses from the campaign bank account.
The use of the candidate's own funds to pay for personal expenses is a non-monetary contribution to the campaign from the candidate if the candidate is not repaid from the campaign bank account. In that case, the contribution rules apply. If the candidate intends to be repaid from campaign funds, the repayment has to be made within 36 months after election day. After that date, payment cannot be made without prior authorization from Elections Canada or a judge.
Note: Per diems (daily allowances) cannot be claimed as a candidate's personal expenses. Only actual paid expenses are considered.
All invoices have to be submitted to the official agent.
If an expense of $50 or more was incurred and paid on behalf of the candidate, the official agent has to keep a copy of the supplier invoice setting out the nature of the expense and proof of payment.
If an expense of less than $50 was incurred and paid on behalf of the candidate, the official agent must keep a record of the nature of the expense and the proof of payment.
For payments made from the petty cash, the person who is authorized to pay petty expenses has to provide the invoices and proof of payment within three months after election day.