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Political Financing Handbook for Leadership Contestants and Financial Agents (EC 20195) – February 2016

This document is Elections Canada’s guideline: OGI 2015-06.

Click on the line for the latest Political Financing Handbook for Leadership Contestants and Financial Agents.

Chapter 1 – Starting the Leadership Contestant's Campaign

This chapter covers the following topics:

Introduction

This chapter focuses on the beginning of the leadership contestant's campaign. It explains what a leadership contest is and who is eligible to become a leadership contestant.

The second part discusses in detail certain tasks that have to be completed at the beginning of the leadership contest, such as appointing a financial agent and an auditor, and opening a bank account. These and other tasks are important to ensure efficient campaign administration and financial management.

1.1 Notice of leadership contest

If a registered party decides to hold a leadership contest, the chief agent of the party has to notify Elections Canada about the start and end dates of the contest. A notice with that information is published on the Elections Canada website.

1.2 How to become a leadership contestant

Definition

From a political financing perspective, a person is deemed to be a leadership contestant from the date a contribution, a loan or a transfer is accepted or a leadership campaign expense is incurred. Contributions, loans or transfers may be accepted before or after the start date of the leadership contest.

Note: Funds provided specifically to pay for expenses incurred outside the contest period are not subject to the controls on contributions and loans in the Canada Elections Act.

A person remains a leadership contestant until the campaign fulfills all financial reporting requirements.

Eligibility

The registered party holding a leadership contest sets the requirements that any person must meet to be a leadership contestant.

Persons holding the following positions have to step down once they become leadership contestants:

Registration process

Every person who accepts contributions, loans or transfers, or incurs leadership campaign expenses has to register as a leadership contestant even if he or she later decides not to run for the leadership.

The General Form – Registered Party Leadership Contestant is used to apply for registration and must include the following:

The Leadership Contestant's Registration Return must accompany the application for registration with a statement in the prescribed form of contributions and loans received prior to the first day of the leadership contest.

Elections Canada maintains the registry of leadership contestants.

Within 30 days after a change in the information contained in the leadership contestant's registration, the contestant has to inform Elections Canada in writing about the change.

The leadership contestant's responsibilities and obligations

The leadership contestant has to appoint a financial agent before accepting contributions, transfers or loans, or incurring leadership campaign expenses. The contestant has to appoint a financial agent and an auditor before filing the application for registration.

Note: Contributions directed through the registered party may not be accepted by the campaign until after the contestant has registered with Elections Canada.

Within 30 days after a change that affects the leadership contestant's registration information, the contestant has to inform Elections Canada in writing about the change.

The leadership contestant must send the signed Leadership Contestant's Statement of Personal Expenses and supporting documents to the financial agent within five months after contest day. The statement must include all personal expenses that were paid by the leadership contestant and not reimbursed by the financial agent.

Note: The leadership contestant must submit the signed Leadership Contestant's Statement of Personal Expenses even if his or her personal expenses were nil.

If a leadership contestant withdraws from the contest after registration, he or she has to send a signed statement to Elections Canada, indicating the date of withdrawal. If the registered contestant is withdrawn by the registered party, the party's chief agent has to send a written statement to Elections Canada, indicating the date of withdrawal.

The registered leadership contestant who withdraws still has to fulfill the reporting requirements up to the date of withdrawal, but is relieved of the interim reporting obligations for any period after the withdrawal. However, he or she must submit the Leadership Contestant's Campaign Return to Elections Canada. For details about financial reporting, see Chapter 4, Reporting Requirements.

1.3 What has to be done at the beginning of the leadership contest

Other tasks also have to be completed at the beginning of the leadership contest. The order in which the tasks are completed may vary. This section presents a typical sequence of events.

Appoint a financial agent

The leadership contestant is required to appoint a financial agent before the campaign can accept contributions, loans or transfers, or incur leadership campaign expenses.

Definition

The financial agent is responsible for administering the leadership contestant's financial transactions and reporting those transactions to Elections Canada as required by the Canada Elections Act.

The contestant may have only one financial agent at a time.

The financial agent's role continues until the contestant's campaign fulfills all financial reporting requirements.

Eligibility

Who can become a financial agent?

Note:  Although it is not a legal requirement, the individual who becomes a financial agent should be experienced in managing finances. The role requires a strong ability to control, record and administer financial transactions, as well as to create financial reports.

Who is not eligible to be a financial agent?

Appointment process

When appointing a financial agent, the contestant must obtain his or her signed consent to act in that capacity.

If for any reason the financial agent is no longer able to continue in that role, the contestant must appoint a new financial agent immediately and notify Elections Canada in writing within 30 days of the new appointment. The notice has to include a signed statement from the new financial agent.

The financial agent's responsibilities and obligations

Appoint leadership campaign agents

Definition

A leadership campaign agent is appointed by the leadership contestant and is authorized to perform specific financial tasks during the campaign.

The leadership contestant may appoint one or more leadership campaign agents.

Eligibility

Eligibility requirements for this role are the same as for the role of financial agent. In addition, the leadership contestant has to specify the terms and conditions of the appointment(s) in writing.

Appointment process

The leadership contestant has to inform Elections Canada within 30 days about an appointment. The written notice has to be certified by the financial agent. It must include:

The leadership campaign agent's responsibilities and obligations

A leadership campaign agent may be authorized to perform one or more of the following tasks:

Appoint an auditor

Definition

The auditor examines the contestant's financial return and prepares a report that states the auditor's opinion as to whether the financial return presents the information contained in the financial records on which it is based.

The contestant may have only one auditor at a time.

Note:  An auditor's report is required if the campaign accepts contributions or incurs leadership campaign expenses totalling $5,000 or more. Note that transfers to affiliated political entities are not leadership campaign expenses.

Eligibility

Who can become an auditor?

Who is not eligible to be an auditor?

Appointment process

The contestant has to appoint an auditor before registering as a contestant. The auditor has to sign a statement consenting to act in that capacity. The statement has to be submitted to Elections Canada with the contestant's registration.

If for any reason the auditor is no longer able to continue in that role, the contestant must appoint a new auditor without delay and notify Elections Canada in writing within 30 days of the new appointment. The notice has to include a signed consent from the new auditor.

The auditor's responsibilities and obligations

The auditor has to prepare a report at the end of the leadership contest if the leadership contestant accepted contributions totalling $5,000 or more, or incurred leadership campaign expenses totalling $5,000 or more. Note that transfers to affiliated political entities are not leadership campaign expenses.

The auditor has a right to access all documents of the contestant, and may require the contestant or the contestant's financial agent to provide any information or explanation that is necessary to enable the auditor to prepare the report.

In accordance with generally accepted auditing standards, the auditor has to examine the contestant's financial records and give an opinion in a report as to whether the contestant's return presents the information contained in the financial records on which it is based.

Open a bank account

The financial agent has to open a separate bank account to be used exclusively for the contestant's campaign. This could happen before or after the contestant's registration. The account has to be with a Canadian financial institution or in an authorized foreign bank, as defined by the Bank Act. The financial agent must be named as the account holder as follows: (name), financial agent. For example: “Peter Raymond, financial agent”. It is also acceptable to add the leadership contestant's name to the name of the bank account. For example: “Peter Raymond, financial agent for Anne Thomas”.

All monetary transactions in relation to leadership campaign expenses have to go through the campaign bank account.

Note:  Expenses incurred outside the contest period cannot be paid using campaign funds.

After the contest, any unpaid claims, loans and surplus have to be dealt with. Once that has been done, the financial agent has to close the bank account and provide Elections Canada with a final bank statement.

Note:  The bank account has to remain open until the campaign fulfills all financial obligations.