Political Financing Handbook for Candidates and Official Agents (EC 20155) – October 2017
13. Reimbursements and Subsidies
This chapter explains who is eligible for refunds, reimbursements or subsidies that Elections Canada distributes after election day and how the amounts are calculated. It covers the following topics:
- Return of the candidate's nomination deposit
- Reimbursement of expenses and candidate's return of overpayments
- Auditor's subsidy
Return of the candidate's nomination deposit
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:
- within one month after election day, return all paper tax receipts to Elections Canada if the campaign obtained them from Elections Canada during the election (this includes unused or cancelled paper tax receipts as well as a copy of each used tax receipt)
- fulfill the reporting requirements
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.
Note: If the official agent obtained paper tax receipts from Elections Canada and does not return all of them 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 paper 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 and overpayments
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:
- was elected or received at least 10% of the valid votes, and
- filed the Candidate's Electoral Campaign Return, the auditor's report and the Checklist for Audits within the original or extended filing deadline
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% of the paid election expenses and paid personal expenses, to a maximum of 60% of the election expenses limit.
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% of the limit, which is $60,000. In this example, the candidate will receive 60% 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:
- by one dollar for every dollar that exceeds the limit by less than 5%
- by two dollars for every dollar that exceeds the limit by 5% or more but by less than 10%
- by three dollars for every dollar that exceeds the limit by 10% or more but by less than 12.5%
- by four dollars for every dollar that exceeds the limit by 12.5% or more
How the reimbursement is paid
Elections Canada authorizes the reimbursement in two installments:
- Initial reimbursement: After election day, once it is confirmed that the candidate received at least 10% of the valid votes or was elected, an installment amounting to 15% of the election expenses limit is paid.
- Final reimbursement: After Elections Canada auditors have reviewed the candidate's return and confirmed that it complies with the Canada Elections Act, any remaining amount is paid.
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 an overpayment
If 60% 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.
The candidate's election expenses limit was $100,000 for the recent election. Because the candidate received 10% of the valid votes, the first installment of the reimbursement is issued. The amount is 15% 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% 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.
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% of the candidate's election expenses limit.
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:
- the amount indicated on the auditor's invoice, to a maximum of $1,500, or 3% of the candidate's election expenses—whichever is less
- a minimum of $250
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.
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% of that amount as a subsidy payment. However, 3% 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.