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Political Financing Handbook for Candidates and Official Agents (EC 20155) – December 2014

This document is the DRAFT version of Elections Canada's guideline: OGI 2014-03.

Chapter 3 – Campaign Outflows

This chapter covers the following topics:

Introduction

The candidate's campaign will incur various expenses as an incidence of the election. These expenses are collectively called electoral campaign expenses. They fall into three categories: election expenses, the candidate's personal expenses, and other expenses not included in the first two categories. This chapter defines the categories of electoral campaign expenses, explains the rules governing them, and gives examples to explain the commonly encountered expense types.

It is important to understand the differences between the expense categories and the way each is administered.

The Canada Elections Act imposes a limit on election expenses to facilitate a level playing field among candidates. The limit applies to all election expenses whether paid, unpaid, or accepted as non-monetary contributions or transfers. This chapter explains how the limits are calculated and applied.

Paid election expenses and paid candidate's personal expenses may be eligible for reimbursement if the candidate's campaign meets certain conditions. This chapter explains the conditions for reimbursement, and Chapter 5, Closing the Candidate's Campaign, provides more detail on how reimbursements are calculated and paid.

Section 3.6 of the chapter explains how to administer electoral campaign expenses. Who can incur expenses? Who can pay expenses? Why do non-monetary contributions and transfers also have to be recorded as electoral campaign expenses? What kind of documentation is required to ensure accurate reporting and compliance with the Canada Elections Act? These questions are dealt with here.

3.1 Electoral campaign expenses

Definition

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:

Electoral campaign expenses
Text version of "Electoral campaign expenses" image

Expenses include:

The official agent has to report the amount charged to the campaign for an electoral campaign expense. Generally this amount is the commercial value of the property or service received.

Commercial value 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:

Commercial value is generally the amount charged in a store for an item or a service.

If the campaign purchases a property or service from an individual for less than commercial value, the official agent has to report the difference as a non­monetary contribution from the individual.

Note: The campaign may purchase property or services for less than commercial value from individuals only, because only individuals can make contributions. However, 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.

If the campaign receives property or a service from an affiliated political entity for less than the commercial value, the official agent has to report the difference as a non-monetary transfer from the affiliated political entity. For a discussion of contributions and transfers, see Chapter 2, Campaign Inflows.

Example

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 official agent records the commercial value, which is the amount the web designer normally charges for his work (in this case $700) as an electoral campaign expense. He also records the difference between the commercial value and the actual amount paid ($300) as a non-monetary contribution from the web designer.

3.2 Election expenses

Definition

An election expense is:

This generally means that any expense reasonably incurred for property or service used during the election period by a candidate's campaign is an election expense. Only some fundraising expenses are exceptions to that rule; later, we will discuss why.

The concept of "directly promoting or opposing a candidate" is not limited to election advertising only. It is to be understood broadly as including expenses necessary to run a campaign, such as office rental, telecommunication services etc.

The election period starts on the day the election is called and ends on election day when the polls close.

Limits on election expenses

The Canada Elections Act imposes a limit on election expenses to facilitate a level playing field among candidates. The limit applies to each candidate's election expenses in the electoral district where he or she is seeking election. The limit applies to the total of all election expenses, whether paid, unpaid, or accepted as non-monetary contributions or transfers.

The candidate, the official agent and any other person authorized in writing by the official agent to incur expenses all have to respect the election expenses limit. They cannot enter into contracts or incur election expenses that exceed the limit. It is highly advisable to agree on an expense approval process; this will help ensure that the candidate, the official agent and any other authorized person are informed and co-operate when incurring expenses. An expense approval process and a campaign budget created at the beginning of the campaign help manage campaign finances effectively.

How are the limits calculated?

The limit amount varies from one electoral district to another. Elections Canada calculates the limit for each electoral district as follows:

  1. Expenses limits are based on the number of names appearing on the preliminary lists of electors or on the revised lists of electors for the electoral district, whichever is greater.
  2. The Canada Elections Act provides for an adjustment for candidates running in electoral districts where there are fewer electors than the national average. In these districts the limit is increased.
  3. The Canada Elections Act also provides for an adjustment for geographically large electoral districts. If the number of electors per square kilometre of the electoral district is less than 10, the candidate's expenses limit is increased.
  4. The limit is then adjusted by the inflation adjustment factor in effect on the day the election is called.
Notification of election expenses limits

Shortly after an election is called, Elections Canada notifies each returning officer of the preliminary election expenses limit. The returning officer advises each campaign of the preliminary limit.

Approximately one week before election day, Elections Canada notifies the candidates directly of their final election expenses limit. The final election expenses limit may be higher but not lower than the preliminary limit.

Limit increases for longer election period

If an election period is longer than 37 days, the election expenses limit increases as follows:

Example

The candidate's election expenses limit for a 37 days election period has been calculated by Elections Canada and it is $96,756. When the election is called, the election period turns out to be 48 days. The limit is then re-calculated as follows: 96,756 / 37 X (48-37) = 28,765.3. Therefore the candidate's new increased election expenses limit is: $96,756.00+ $28,765.30 = $125,521.30

Note: This information is also available on the Elections Canada website.

Reimbursement of paid election expenses and paid candidate's personal expenses

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:

Reduction of reimbursement amount

If the candidate's election expenses exceeded the election expenses limit, the reimbursement amount is reduced.

For a detailed discussion of reimbursements, see Chapter 5, Closing the Candidate's Campaign.

Election expenses

The following are examples of typical election expenses.

Election advertising

Election advertising is the transmission to the public of an advertising message promoting or opposing the election of a candidate during the election period. Election advertising has to be authorized by the official agent. This authorization has to be mentioned in or on the message – for example, "Authorized by the official agent of John Smith."

The commercial value of advertising conducted during an election, including the cost of production and distribution, is to be reported as an election expense.

Example

In anticipation of an upcoming election, the official agent purchases flyers before the election is called and distributes them during the election period. The commercial value of the flyers distributed during the election period – including the design, printing and distribution – is an election expense.

Election advertising – use of social media and the Internet

The term "social media" designates online tools and platforms that allow users to publish and share content on the web.

The rules governing the use of social media for advertising are the same as the rules applied to other forms of advertising. The official agent has to authorize any election advertisement transmitted to the public and that authorization must be noted in or on the advertisement. Also, the official agent has to report as election expenses all the expenses related to the design, development and distribution of online advertising or a website used during an election. This includes all expenses, not merely any incidental costs incurred to modify an existing website for election purposes. In cases in which a pre-existing website was used, a quote from a commercial provider should be obtained to establish the current commercial value of developing an equivalent website.

For more on using existing websites, see Use of existing resources later in this section.

Examples
  1. A candidate has a professionally designed website created and hosted before the calling of the election. When the election is called, the candidate uses his website to promote his campaign. The commercial value of creating the website is an election expense, together with the fees for hosting the website during the campaign.
  2. A group page has been created for the candidate on a free social networking site. Volunteers manage the page and post articles related to the candidate's campaign. As long as the volunteers are helping outside their regular working hours and are not self-employed in the business of managing social media, the volunteer labour is not an expense.
Election advertising – used signs

Signs can often be used for more than one election. If a campaign uses signs in a second or subsequent election, the amount of election expense to be recorded is the current commercial value of equivalent signs.

Reused signs also have to be recorded as a non-monetary transfer or contribution received from the entity or individual that had possession of the signs. Generally this is the registered association or the candidate. Keep in mind that contribution and transfer rules apply to these transactions.

For more details on signs and other existing resources please see the section Use of existing resources.

Voter contact calling services

Voter contact calling services are services involving the making of calls during an election period for any purpose related to an election, including:

The commercial value of voter calls conducted during an election, including the cost of production and distribution, is to be reported as election expense.

Assets

If the candidate's campaign purchases an asset and uses it during the election period, the value of the asset recorded as an election expense is the lower of the commercial value of renting a similar asset for the same period or the purchase price.

For low-value items such as office supplies, the full purchase price (the commercial value) must be recorded.

Assets might be received during the campaign in the form of a contribution from an individual or a transfer from the registered party or the registered association. In that case, the commercial value of the asset has to be recorded as a non­monetary contribution or transfer. The amount to be recorded as an election expense is the lower of the commercial value of renting a similar asset for the same period or the purchase price. The remaining amount, if any, is recorded under other electoral campaign expense.

Note: Amortization may not be used as a method of calculating the commercial value of the use of the asset.

Note: Assets purchased during the campaign must be disposed of at the end of the campaign. They can be sold at fair market value, or else transferred to the party or to the registered association in the candidate's electoral district.

Examples
  1. The candidate's campaign rents two computers from a local office supplier for $500 on the day the election is called. The rental agreement is for two months (61 days), and the election period is 37 days. The cost of renting the computers during the election period is an election expense, and it is calculated as follows: $500/61 x 37 = $303.30. The remaining amount, $196.70, is recorded under other electoral campaign expense.
  2. On the day the election is called, the official agent pays $100 at a garage sale for the purchase of a fax machine for the campaign. The commercial value of renting a similar fax machine during the election period would have been $150. The official agent records $100 as an election expense since the purchase price, $100, is lower than the rental rate.
Renting a campaign office

The campaign may rent an office for the candidate's campaign. The portion of the rent incurred before and after the election period has to be recorded under other electoral campaign expense. Only the portion of the rent used during the election period is an election expense.

Example

The campaign rents an office on March 1, a month before the election is called. The rental agreement is for three months and the rent is $300 a month. The election period is 37 days.

The election expense to be recorded is the rent for the month of April, plus the rent for 7 days in May: $300 + (7/31 x $300) = $367.74. The remaining amount, $532.26, has to be recorded under other electoral campaign expense.

Installation costs and other office expenses

Installation cost incurred for items used during the election period is an election expense even if the installation takes place before the election is called, as long as the item itself is an election expense. Installation costs cannot be pro-rated.

Other office expenses include the cost of buying office supplies, such as paper or toner cartridges, or supplying refreshments during meetings. As long as these supplies are used during the election period, the cost of buying them is an election expense.

Example

The full installation cost of any equipment (telephones, computers, fax machines, etc.) is an election expense and cannot be pro-rated between pre- and post-election periods regardless of when the installation takes place.

The cost of telephone usage, however, will have to be reported under other electoral campaign expense for the time before and after the election period, while the portion of usage during the election period is an election expense.

Compensation paid to the official agent or other campaign workers

The campaign may choose to pay compensation to the official agent or other campaign workers. In that case, the compensation related to work performed during the election period is an election expense, while the compensation related to work performed after the election period has to be reported as an other electoral campaign expense.

Note that work performed prior to the election period may also be an election expense if the output of that work is used during the election period. For example, if signs are installed by campaign workers prior to the election being called, any compensation paid would be an election expense.

It is advisable to include with the candidate's return a written contract or other documentation about any compensation paid, because in the absence of evidence, the payment of salaries may be considered an inappropriate use of campaign funds that would need to be returned.

Note: Any amount paid for the compensation of candidate's representatives at the polls or at the office of the returning officer when electors receive special ballots is to be reported as a personal expense of the candidate.

Examples
  1. The candidate decides to pay a salary of $800 to her official agent for work during the election period. This amount has to be recorded as an election expense.
  2. The candidate decides to pay $50 compensation to each of her six representatives at the polls on election day. The total amount paid, $300, has to be recorded as the candidate's personal expense.
Expenses of volunteers

Expenses of volunteers (for example, the costs of refreshments, lodging or transportation) are election expenses if the items were used during the election period. Unpaid campaign workers are generally providing volunteer labour. Volunteer labour is any service provided free of charge by a person outside their working hours. It does not include a service provided by a self-employed person who normally charges for that service. Volunteer labour is not considered an election expense.

For more details about volunteer labour, see Chapter 2, Campaign Inflows.

If a volunteer pays for an expense incurred as an incidence of the election, the amount must be reported as a non­monetary contribution and an expense. However, if the amount is $200 or less and the person is not in the business of providing the service, the non­monetary contribution is deemed to be nil and no expense has to be reported.

Examples
  1. Late one night during the election period, volunteers help in the campaign office to prepare hundreds of flyers for mailing. The official agent orders pizza and pays $83.50 to the pizza delivery person. The amount of $83.50 is an election expense.
  2. A volunteer is driving around in her own car to deliver flyers during the election period. She pays $30 to fill up her car. If the amount is not reimbursed by the campaign, the volunteer made a non-monetary contribution. However, because the amount is below $200, the non­monetary contribution is nil and consequently the expense is deemed to be nil.
Leader's tour expenses

The party leader's tour expenses are election expenses of the party and may not be election expenses of the candidates. In addition to the expenses of transportation, the party has to include the expenses of all other related items, such as meals, refreshments, salaries of party staff assigned to the tour, and communications equipment rented for the media.

If the candidate's campaign incurs expenses to attend the leader's tour event, such as transporting campaign staff to the event, these are expenses of the candidate.

Expenses of senators, ministers or another candidate

If a senator, a minister or another candidate campaigns on behalf of the candidate, the expenses related to that person's involvement in the campaign are election expenses and have to be authorized in advance by the official agent, the candidate or a person authorized in writing by the official agent. Any expense incurred in relation to the campaign has to be reimbursed using campaign funds or accepted as a non­monetary contribution if paid by an eligible contributor or as a non-monetary transfer if paid by the party or a registered association of the party.

Use of existing resources

Electoral campaigns commonly make use of existing resources such as websites and signs. Suppliers of such resources to candidate campaigns include registered associations and Member of Parliament offices.

Incumbent Members of Parliament sometimes wish to make use of parliamentary resources such as websites and signs during their electoral campaigns. The use of such resources during the election period is an election expense. If these resources are not paid by the campaign, their use is a non­monetary contribution from the elected Member and is subject to the contribution limit.

Similarly, registered associations often provide resources such as computers, photocopiers, office supplies, furniture, websites and signs to a candidate's campaign. If these resources are used during the election period, they are election expenses of the candidate and, if not paid by the campaign, are non­monetary transfers from the registered association.

Staff of an elected Member

If employees on the staff of an elected member engage in political activities to support a candidate during the election period, the salaries of these persons are election expenses of the candidate and, if not paid by the campaign, are non­monetary contributions from the elected member. However, if the employees work on the candidate's campaign outside their normal business hours or are on leave, their involvement is volunteer labour and is therefore neither an election expense nor a non­monetary contribution. Volunteer labour is any service provided free of charge by a person outside their working hours. It does not include a service provided by a self-employed person who normally charges for that service.

Websites and billboards

Candidates may have websites that are designed and maintained using parliamentary, registered association or other resources. If such a website stays online during the election period, its commercial value – including design, maintenance and hosting – is an election expense of the candidate. Elections Canada will accept the current commercial value of an equivalent website as the commercial value of a pre-existing website.

Similarly, the commercial value, including design, production and installation of any pre-existing billboards or signs that remain in place during the election period, are election expenses. Elections Canada will accept the current commercial value of an equivalent billboard or sign as the commercial value of pre­existing billboards or signs.

Any election advertisement transmitted to the public including pre­existing websites and billboards or signs have to be authorized by the official agent. The authorization must be on or in the advertisement.

Greeting cards sent and receptions held during the election period

Members of Parliament, registered associations or candidates may distribute greeting cards during a holiday season. If the greeting cards are distributed during the election period, they are election advertising and have to be reported as election expenses. If these expenses are not paid by the campaign then they could be either non­monetary contributions if paid by an individual or non­monetary transfers if paid by the registered party or a registered association.

If a greeting card is in transit on the day the election is called and the candidate does not have the ability to stop the delivery, it will not be considered an election expense even though the actual delivery will take place during the election period.

Holiday season receptions held during the election period are election expenses. If these expenses are not paid by the campaign then they could be either non­monetary contributions if paid by an individual or non­monetary transfers if paid by the registered party or a registered association. However, any greeting card distributed in the 36 days preceding a fixed date election will be considered an election expense.

Householders issued by members of Parliament

A Member of Parliament who is running as a candidate in an election might issue a householder during the election period. This is an election expense and if not paid by the campaign a non­monetary contribution from the elected member.

If a householder is in transit on the day the election is called and the candidate does not have the ability to stop the delivery, it will not be considered an election expense even though the actual delivery will take place during the election period. However, any householder distributed in the 36 days preceding a fixed date election will be considered an election expense.

Note: The use of Parliamentary resources may also be governed by other rules, including those imposed by the House of Commons.

3.3 Candidate's personal expenses

Definition

This section deals with the personal expenses of the candidate that are reasonably incurred in relation to his or her election campaign. These expenses are also regulated by the Canada Elections Act. They have to be reported and may be eligible for reimbursement if the conditions for reimbursement are met. However, they do not count against the election expenses limit. The candidate's personal expenses include:

Incremental expenses

The candidate's personal expenses have to be incurred as an incidence of the election. They may include new expenses or increases in normally incurred expenses. In other words, they have to be expenses that the candidate would not normally incur if there was no election.

Example

The expenses of day-to-day meals in the candidate's home are not related to the campaign because meals are consumed regularly outside the election period. On the other hand, if the candidate has to travel because of the campaign, he or she might incur meal expenses during the trip. A $50 dinner consumed by the candidate while travelling in the riding is recorded as the candidate's personal expense.

Candidate's personal expense categories

The following are examples of typical personal expenses that the candidate might incur in relation to his or her campaign.

Travel and living

If the candidate travels to meet constituents during the campaign, the travel and living expenses incurred for the trips are personal expenses of the candidate. If the candidate relocates temporarily to his or her electoral district during the campaign, the rental and the travel expense to reach the electoral district are personal expenses of the candidate.

If the candidate uses a personal vehicle for travel, the candidate may submit receipts for gas and other expenses, or may submit a mileage log. The mileage log should contain the following information: the date, the point of origin, the destination, the kilometres travelled and the purpose of travel. Elections Canada follows the kilometric rates established by the Treasury Board of Canada.

An important point is that the expenses of campaign workers and volunteers accompanying the candidate during the election period on trips, or assisting the candidate during events, are considered election expenses – not the candidate's personal expenses.

Note: The travel claim has to be either for actual expenses, such as fuel and rental costs, or else for mileage. The claim cannot be for both.

Example

The candidate rents a car to travel in the riding and meet with voters during the election period. The car rental and fuel costs are recorded as personal expenses of the candidate. In addition, the cost of the candidate's lodging and meals during the trip are also personal expenses. The candidate travels with his campaign manager, who is a volunteer. The expenses associated with the campaign manager's lodging and meals during the trip are election expenses.

Child care

During the election campaign, the candidate might engage in campaign activities during the daytime or evenings, or on weekends. Child care expenses incurred as an incidence of the election are incremental expenses because they would not normally occur if there was no election. The additional child care cost is a personal expense of the candidate.

Care for a person with a physical or mental incapacity

If the candidate normally provides care for a person with a physical or mental incapacity, additional care might be needed during the campaign for the times when the candidate is engaged in campaign activities. The cost of additional care is a personal expense of the candidate.

Expenses related to a disability

In the case of a candidate with a disability, the additional personal expenses that are related to the disability, and are reasonably incurred as an incidence of the candidate's campaign, are personal expenses of the candidate.

Example

The candidate has a disability that requires the services of a caregiver when the candidate travels. This person accompanies the candidate on trips in the candidate's riding. The expenses of this additional care are personal expenses of the candidate.

Expenses to pay candidate's representatives

Unremunerated candidate's representatives at the polls provide volunteer labour, which is not considered an election expense.

However, if the candidate decides to pay for the compensation of his or her representatives at the polls or at the office of the returning officer when electors receive special ballots, these expenses are personal expenses of the candidate.

Other personal expenses

This category includes personal expenses other than those in the preceding categories. Unlike the other categories of personal expenses, the category has a limit of $200 established by Elections Canada.

Other personal expenses in excess of the $200 limit that were reasonably incurred as an incidence of the election are reported as electoral campaign expenses other than election or personal expenses.

This is the category in which to report items such as costs of dry cleaning, personal grooming or the candidate's cellphone use. All the items reported must be for expenses that the candidate would not normally incur if there was no election.

Example

The candidate makes and receives calls related to the campaign on her own cellphone. The candidate can claim any expenses in excess of his or her normal cell phone expenses as other personal expenses, to a maximum of $200. Amounts in excess of $200 reasonably incurred as an incidence of the election are reported as electoral campaign expenses other than election or personal expenses.

3.4 Other electoral campaign expenses

Definition

Certain electoral campaign expenses incurred for the campaign are not to be included as election expenses or the candidate's personal expenses, and are not subject to the expenses limit. These expenses are reported as other electoral campaign expenses in Part 3a, column 9 of the candidate's return, under "Amounts not included in election expenses".

Expenses before or after the election

An expense for property or a service used before the calling of the election is an electoral campaign expense only to the extent that it was reasonably incurred as an incidence of the election. A purpose test should be applied to determine whether or not a pre-writ expense is an electoral campaign expense; if the candidate was not planning to participate in a future election, would the expense have been incurred?

An expense for property or a service used after election day is an electoral campaign expense only to the extent that it is reasonably serving some purpose related to the election.

Examples
  1. The campaign rents an office on March 1, a month before the election is called. The rental agreement is for three months and the rent is $300 a month. The election period is 37 days, starting from April 1. The portion of the rent that has to be recorded under other electoral campaign expense is $532.26. That is the amount remaining after the election expense, $367.74, is subtracted from the rent total.
    Calculation: $900 – ($300 + (7/31 x $300)) = $532.26
  2. After election day, the candidate invites the volunteers of his campaign to a thank-you party. Although the event is outside the election period, the expense incurred is an incidence of the election. Accordingly, the expenses have to be reported under other electoral campaign expenses.

Compensation paid to the candidate to replace revenue

Compensation may be paid to the candidate from the campaign bank account to replace revenue forgone by the candidate during the election period.

It is advisable to include a written contract or other documentation about any compensation paid, because in the absence of evidence, the payment of salaries may be considered an inappropriate use of campaign funds that would need to be returned.

Fundraising expenses

Expenses incurred for fundraising activities are not election expenses. The official agent has to authorize expenses incurred for fundraising activities and record them as other electoral campaign expenses.

Note: The expense associated with the production and distribution of advertising and promotional materials related to a fundraising activity is an election expense to the extent that the advertising and promotional materials are used during the election period.

Example

The official agent organizes a fundraising event one evening during the election period. Light refreshments and appetizers are served while Christine, the candidate, outlines her platform and answers questions. The participants are asked to make a contribution to Christine's campaign. Because this is a fundraising event, the costs of the food, beverages, room rental, etc., are not election expenses but have to be recorded as other electoral campaign expenses.

During the fundraising event, the attendees find flyers on their seats, promoting Christine. The cost of these flyers is an election expense.

Unused inventory

Any inventory or asset that was never used during the election period and remains on hand after election day is not an election expense. The unused property is considered to be an other electoral campaign expense and has to be reported as such.

The unused inventory should be sold at commercial value, or transferred to the registered association or the registered party.

Interest on loans before and after the election period

Interest on loans payable before and after the election period has to be recorded under other electoral campaign expense.

Cost of preparing reports

Expenses associated with fulfilling the various reporting obligations set out in the Canada Elections Act are reported as other electoral campaign expenses.

Example

The cost of a courier service used two months after election day to send the candidate's return has to be reported as an other electoral campaign expense.

3.5 Transfers sent

Transfers sent by the candidate's campaign

The following transfers may be sent by the candidate's campaign:

Reporting transfers sent

The official agent has to include the following information when reporting a transfer in the Candidate's Electoral Campaign Return:

Independent candidates

An independent candidate may not send any transfers to other political entities.

For a quick reference guide to eligible and ineligible transfers, see the Transfers types and rules table in the Tables and Reminders section.

3.6 Administering electoral campaign expenses

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 return.

Expenses cannot be transferred

It is important to differentiate between the candidate's electoral campaign expenses and the expenses of the candidate's registered party. The Canada Elections Act specifies separate expenses limits for the registered party and each of its candidates. The Act prohibits the transfer of expenses without accompanying property or services. Each entity has to report the expenses it incurred for property and services it used during the electoral campaign.

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:

Note: A registered agent of a registered party can also incur or pay expenses for the electoral campaign of the leader of the registered party.

How to administer shared expenses?

Campaigns might decide to share the expenses of certain events during the election period, such as a speaking tour from a senator or another candidate. These expenses must be authorized in advance by the official agents of each campaign.

Each campaign that participates in a shared event must pay a reasonable allocation of the expense and report its share as an election expense. One campaign may not pay the expenses of another, because transfers between campaigns are not allowed.

Non-monetary contributions or transfers are also recorded as expenses

When a non-monetary contribution is made and the donated property or service is used for campaign purposes, the official agent must record the commercial value of the property or service as an electoral campaign expense, as well as a contribution.

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 is deemed to be nil and consequently no expense has to be reported. However, all non-monetary transfers, provided by the registered party or a registered association must be reported, regardless of commercial value.

A non-monetary transfer received by the candidate's campaign has to be recorded by the official agent as an electoral campaign expense as well as a transfer. The electoral campaign expense reported is the current commercial value of the property or service received. The date and the nature of the transfer determine the type of electoral campaign expense.

An electoral campaign expense related to a non-monetary contribution or transfer is incurred when the contribution or transfer is accepted.

Examples
  1. 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.
  2. 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.

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 his or her official agent is allowed to pay the candidate's personal expenses. The candidate can pay them using his or her 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 he or she 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.

Invoices

If an expense of $50 or more was incurred and paid on behalf of the candidate, the official agent has to keep 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.

Property or services provided by the party or the registered association

When property or a service is provided to the candidate by the registered party or registered association, a copy of the original supplier invoice as well as the invoice from the party or association must be included with the candidate's return. The documentation should confirm the amount reported in the candidate's return. Common items supplied by the party or association include signs and riding service packages.

Example

The candidate's registered party purchases signs from Signs Inc. for $1,500 and resells them to the candidate's campaign for $1,500. The party has to provide a copy of the original invoice from Signs Inc. for $1,500, as well as an invoice from the party for $1,500.

Claims and loans repayment

All invoices have to be submitted to the official agent.

Claims or loans have to be paid within 36 months after election day.

For a detailed discussion of claims and loans, see Chapter 5, Closing the Candidate's Campaign.

Administering the candidate's personal expenses

As set out in the Canada Elections Act, the candidate is responsible for keeping invoices and other documents in relation to his or her personal expenses.

The candidate has to prepare the Candidate's Statement of Personal Expenses and submit it to the official agent within three months after election day. All invoices and receipts have to accompany the personal expenses statement. For details about completing the personal expenses statement, see Chapter 4, Reporting Requirements.

Note: The candidate has to submit the Candidate's Statement of Personal Expenses even if the personal expenses were nil.

Supporting documentation

The official agent must maintain proper books and records throughout the campaign to ensure accurate reporting and compliance with the Canada Elections Act and the Income Tax Act.

The official agent has to prepare the Candidate's Electoral Campaign Return and submit it to Elections Canada within four months after election day. The candidate's return has to be accompanied by supporting documents, including the documents related to electoral campaign expenses:

For details about completing the candidate's return, see Chapter 4, Reporting Requirements.