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Political Financing Handbook for Candidates and Official Agents (EC 20155) – April 2015

This document is Elections Canada's archived guideline OGI 2014-03 and is no longer in effect.

The version replacing this document is available in the Registry.

Chapter 5 – Closing the Candidate's Campaign

This chapter covers the following topics:

Introduction

Once the candidate's reporting requirements are met, it is time to close the candidate's campaign. This chapter explains what has to take place before the official agent can close the campaign bank account and subsequently the candidate's campaign.

First is the distribution of funds administered by Elections Canada after election day for example, the return of the nomination deposit, the reimbursement of paid election expenses and paid candidate's personal expenses, and the payment of the auditor's subsidy.

The official agent has to manage unpaid claims and loans and dispose of any surplus in accordance with the rules and timelines of the Canada Elections Act. In addition, the official agent has to inform Elections Canada about these transactions by updating the candidate's return to reflect the payment of unpaid claims or loans, and by submitting an amended candidate's return or a statement of surplus.

Once all unpaid claims, loans, other financial obligations and any surplus have been dealt with, the official agent can close the campaign bank account and send the final bank statement to Elections Canada.

Closing the Candidate's Campaign
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5.1   Distribution of funds administered by Elections Canada

Elections Canada administers certain funds that are distributed after election day to eligible candidates. This section explains the rules governing the following:

Returning the candidate's nomination deposit

Chapter 1 of this handbook discusses how to become a candidate. Among the requirements in the candidate's nomination process is the payment of a $1,000 nomination deposit when the candidate's nomination paper is filed with the local returning officer.

To receive a refund of the nomination deposit after the election, the candidate or the candidate's official agent has to:

The nomination deposit refund is payable to the official agent and must be deposited to the campaign bank account. The official agent may designate the original payer as the recipient. In that case, the official agent has to submit an assignment agreement to Elections Canada.

Returning tax receipts

If paper-form tax receipts were used, the official agent has to return all unused or cancelled tax receipts as well as a copy of each used tax receipt to Elections Canada within one month after election day. If the official agent does not return all tax receipts before the deadline, the $1,000 nomination deposit will be forfeited.

EFR makes it easier

There is a great advantage to using Elections Canada's Electronic Financial Return (EFR) software for printing tax receipts. If the official agent did not obtain the paper-form tax receipts from Elections Canada and used EFR to issue and print tax receipts, the requirement to return unused tax receipts does not apply.

Note: The EFR software is available on the Elections Canada website.

Reimbursements

The Canada Elections Act provides for a partial reimbursement of paid election expenses and paid candidate's personal expenses if the conditions for reimbursement are met.

A candidate's campaign is eligible for reimbursement if the candidate:

What is reimbursable

Only two types of expenses are reimbursable: election expenses paid from the campaign bank account, and paid personal expenses of the candidate.

How the reimbursement is calculated

Eligible candidates are entitled to receive a reimbursement of 60 percent of the paid election expenses and paid personal expenses, to a maximum of 60 percent of the election expenses limit.

Example

The election expenses limit in the candidate's riding is $100,000. The candidate's paid election expenses and paid personal expenses total $12,500. The maximum reimbursement that the candidate could receive is 60 percent of the limit, which is $60,000. In this example, the candidate will receive 60 percent of $12,500, or $7,500.

Reduction of reimbursement amount

If the candidate's election expenses exceeded the election expenses limit, the reimbursement amount is reduced as follows:

How the reimbursement is paid

Elections Canada authorizes the reimbursement in two installments:

The reimbursement cheque is payable to the official agent and must be deposited to the campaign bank account. The official agent may designate another person as the recipient (for example, the registered party). In that case, the official agent has to submit an assignment agreement to Elections Canada.

Returning overpayment

If 60 percent of the total paid election and paid personal expenses is less than the initial reimbursement, the official agent is responsible for returning the overpayment to Elections Canada in the form of a cheque payable to the Receiver General for Canada. Once Elections Canada completes the review of the candidate's return, it will inform the official agent about the amount to be returned.

Example

The candidate's election expenses limit was $100,000 for the recent election. Because the candidate received 10 percent of the valid votes, the first installment of the reimbursement is issued. The amount is 15 percent of $100,000, that is $15,000. However, the total amount of paid election expenses and paid personal expenses of the candidate is $7,100. Because the reimbursement is paid to a maximum of 60 percent of the paid election expenses and paid personal expenses, the candidate is only entitled to receive a reimbursement of $4,260.

The official agent has to return the difference between the reimbursement payment and the eligible amount ($15,000  $4,260 = $10,740) to Elections Canada by issuing a cheque payable to the Receiver General for Canada.

Additional payment

If an amended candidate's return is filed with Elections Canada after the filing of the initial return, the candidate may qualify for an additional payment if the amount of paid election expenses and paid personal expenses increases as a result of the amendment. However, this reimbursement is paid only if the candidate has qualified for the original reimbursement and if the additional reimbursement does not bring the total reimbursement to more than 60 percent of the candidate's election expenses limit.

Auditor's subsidy

The candidate's auditor will receive a subsidy from Elections Canada, paid directly to the auditor. Once Elections Canada receives the Candidate's Electoral Campaign Return, the Auditor's Report, the Checklist for Audits and the auditor's invoice, and once it completes reviewing the candidate's return, it authorizes the auditor's subsidy payment.

How the subsidy is calculated

The auditor's subsidy is calculated as follows:

Note: If the auditor's subsidy is less than the total fee charged by the auditor, the difference is an electoral campaign expense, and the candidate's campaign is responsible for paying the remaining amount.

Example

The official agent submits the auditor's invoice for $500 with the Candidate's Electoral Campaign Return and other required documents. The total amount of the candidate's election expenses is $7,200. The auditor is entitled to receive 3 percent of that amount as a subsidy payment. However, 3 percent of $7,200 ($216) is less than the minimum amount payable. Accordingly, Elections Canada will authorize payment of the minimum amount of $250.

The official agent has to pay the remaining $250 to the auditor from campaign funds or arrange to have the registered association or party pay the fee on behalf of the campaign.

5.2   Managing unpaid claims and loans

This section explains the rules governing unpaid claims and loans.

Claims and loans can be paid up to 36 months after election day.

If a claim or loan remains unpaid from the time the original return is filed to 36 months after election day:

If a claim or loan is still unpaid 36 months after election day:

For details about reporting unpaid claims and loans, see Section 4.2, Mandatory documents and supporting documentation, and Section 4.3, Submission to Elections Canada.

Note: If an elected candidate does not file the updated candidate's return, the Canada Elections Act provides that a Member of Parliament shall not continue to sit or vote as a member until the documents are submitted or an extension is granted.

Authorization to pay claims or loans after 36 months

The following persons may submit a written application to be paid or to pay a claim or loan later than 36 months after election day:

Authorization for payment of the amount claimed is needed from Elections Canada if payment of the claim or loan was not made within 36 months after election day.

Elections Canada may impose any term or condition on the authorized payment.

5.3   Filing an amended candidate's return

An amended Candidate's Electoral Campaign Return has to be filed with Elections Canada to:

Corrections or revisions requested by Elections Canada

In certain circumstances there is a need to make corrections or revisions in the candidate's return.

On reviewing the candidate's return, Elections Canada may request the candidate or his or her official agent to correct or revise the candidate's return within a specified period.

Note: If corrections or revisions requested by Elections Canada are not made within 2 weeks after the deadline, and a request to be relieved of the obligation to comply with the request has not been made to a judge, a Member of Parliament shall not continue to sit or vote as a Member until the corrections or revisions are made. Similarly, a Member of Parliament shall not continue to sit or vote as a Member, if the request to be relieved of the obligation to comply with the request has been rejected by a judge.

Corrections or revisions requested by the candidate or the official agent

The candidate or the official agent may become aware of a need to make a correction or a revision to a return that has been filed. In that case, the candidate or the official agent has to submit a written request for authorization to file an amended return.

An amended return must be submitted within 30 days after the correction or revision was authorized.

Note: If corrections or revisions requested by the candidate or the official agent were not made within the deadline, a Member of Parliament shall not continue to sit or vote as a Member until the corrected or revised return is submitted.

Submitting a full return is not necessary. Only the new or corrected data has to be submitted to Elections Canada along with a declaration signed by the candidate or the official agent.

For more on filing an amended candidate's return, see Section 4.3, Submission to Elections Canada.

Example

The Elections Canada auditor notices that the deposits in the campaign bank account exceed the inflows reported in the candidate's return. The auditor calls the candidate's official agent and asks her to find out the cause of the discrepancy. It is determined that a contribution was omitted from the candidate's return. The official agent then has to request authorization and file an amended return within the period specified by Elections Canada.

5.4   Disposing of surplus

After all financial obligations have been completed, the campaign must dispose of any surplus of funds in accordance with the Canada Elections Act. The amount of the surplus should equal the money left in the campaign bank account after all the financial obligations have been met.

Definition

The surplus amount of electoral funds is the amount by which the candidate's electoral revenues exceed the total of the candidate's electoral campaign expenses paid and transfers made by the candidate's campaign.

Disposing of surplus
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Electoral revenues include:

For the purposes of surplus calculation, expenses include all expenses that were paid using campaign funds:

Transfers made by the candidate's campaign include:

Transfer or sale of capital assets

Capital asset means any property with a commercial value of more than $200 that is normally used outside an election period other than for the purposes of an election.

If the campaign has any capital asset whose purchase constitutes an electoral campaign expense, the official agent must either transfer the asset to the registered party or the registered association, or sell the asset at fair market value and include the funds in the surplus disposition.

Notice of estimated surplus by Elections Canada

After the review and the payment of the final reimbursement and the auditor's subsidy, in some cases it is determined that the candidate has a surplus of electoral campaign funds. Elections Canada sends a notice about the estimated amount of the surplus to the candidate's official agent.

The official agent has to dispose of the surplus within 60 days of receiving the notice.

If official agent is aware of a surplus

If the official agent is aware of a surplus of electoral funds but has not yet received a notice from Elections Canada, the official agent has to dispose of the estimated surplus within 60 days after:

How to dispose of a surplus

If the candidate was endorsed by a registered party, surplus funds have to be transferred to the registered party or to a registered association of that party in the candidate's electoral district.

Independent and non-affiliated candidates have to transfer surplus funds to Elections Canada by issuing a cheque payable to the Receiver General for Canada.

Candidate's Statement of Surplus

The official agent has to submit the Candidate's Statement of Surplus / Amended Campaign Return form within seven days after disposing of the surplus.

In some cases, amendments are also made to the original candidate's return to report financial transactions that occurred since the date the return was submitted. In these cases, any new financial transactions reported in the Candidate's Statement of Surplus / Amended Campaign Return will be treated as a request to correct or revise the Candidate's Electoral Campaign Return and Elections Canada will update the return accordingly.

Section 5.3 discusses the reasons for submitting amendments to the candidate's return.

Note: Elections Canada publishes the notice referring to the disposal of the surplus on its website.

5.5   Closing the campaign bank account

Once all unpaid claims, loans, other financial obligations and any surplus have been dealt with in accordance with the Canada Elections Act, the official agent has to close the campaign bank account.

The official agent has to send the final statement of the bank account to Elections Canada.