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Political Financing Handbook for Electoral District Associations and Financial Agents (EC 20089) – October 2017

1. Reference Tables and Timelines

This chapter presents quick reference tools for electoral district associations and financial agents. It covers the following topics:

Becoming a registered electoral district association

Why become a registered association?

An electoral district association is defined as an association of members of a political party in an electoral district. An association has to register with Elections Canada if it wants to perform financial tasks such as:

  • accepting contributions
  • issuing tax receipts, once it has written authorization from the party leader
  • transferring funds, property or services to other political entities (see the transfer restrictions later in this chapter)
  • accepting surplus funds from a nomination contestant (if the association held the contest), from a candidate in the same electoral district or from a leadership contestant

A registered party can have at most one registered association in an electoral district.

Applying for registration

To apply, the chief executive officer has to fill out the General Form—Electoral District Association and send it to Elections Canada.

The form explains what information and signatures to include, notably:

  • the financial agent's contact information and signed consent to act in that role
  • the auditor's contact information and signed consent to act in that role
  • a signed declaration from the registered party leader, certifying that the association is an electoral district association of the party

After reviewing the application, Elections Canada will inform the party and the association that:

  • the association is registered in the Registry of Electoral District Associations, or
  • the association did not meet all the requirements but may try to make the necessary modifications to qualify

An association becomes registered on the date it is entered in the registry. It remains registered as long as it continues to meet the requirements for staying registered, including mandatory reporting.

Establishing the first fiscal period after registration

A registered association's fiscal year must be a calendar year (January 1 to December 31).

Depending on the date of registration, the length of a registered association's first fiscal period must be modified to end on December 31. The first fiscal period may not be less than 6 months or more than 18 months.

Examples
  1. If an association is registered on October 1, the association's first fiscal period will end on December 31 in the following year, 15 months after registration.
  2. If an association is registered on March 1, the association's first fiscal period will end on December 31 in the same year, 10 months after registration.

Voluntary and involuntary deregistration of a registered association

Reasons for the deregistration of a registered association

Voluntary
  1. Registered association asks to be deregistered > Request must be made in writing, signed by the chief executive officer and financial agent
  2. Registered party asks to have an association deregistered > Request must be made in writing, signed by the party leader and two party officers

Note: Elections Canada cannot process a request for voluntary deregistration during an election period.

Involuntary
  1. Registered party is deregistered, which means its registered associations are too
  2. Electoral district boundaries are redrawn and the association does not file a notice to continue under the new boundaries
  3. Registered association fails to meet its reporting obligations (see details below)

Failure to meet reporting obligations: risk of deregistration

Elections Canada may deregister a registered association if it fails to provide:

  • an annual statement confirming the validity of its registry information by the deadline
  • any document required to inform Elections Canada about a change in its registry information or any new appointment within 30 days of the event
  • the Statement of Registered Association's Assets and Liabilities within six months after the effective date of registration
  • a nomination contest report within 30 days after the contest selection date
  • the Registered Association Financial Transactions Return and, if required, the auditor's report by May 31 each year

Elections Canada will first notify the association's chief executive officer and financial agent of the failure to meet the obligation. It will ask the association to:

  • correct the omission within 30 days of receiving the notice, or
  • satisfy Elections Canada that the omission was not the result of negligence or a lack of good faith

Note: Elections Canada also sends a copy of this notice to the leader and the chief agent of the association's registered party.

If the association does not correct the omission but instead satisfies Elections Canada that the omission was not the result of negligence or a lack of good faith, Elections Canada may:

  • exempt the association in whole or in part from complying with the obligation, or
  • specify a new deadline to comply with the obligation

Deregistration process

If a registered association is deregistered:

  • Elections Canada sends a notice to the association with the effective date of deregistration. This date will be at least 15 days after the notice date.
  • A copy of the notice is sent to the registered party of the association.
  • The notice is published on Elections Canada's website and in the Canada Gazette.

Restrictions and obligations after deregistration

After the effective date of deregistration, the association is no longer allowed to:

  • accept contributions
  • issue tax receipts
  • transfer funds, property or services to other political entities
  • accept surplus funds from other political entities

The financial agent remains responsible for filing the Registered Association Financial Transactions Return and, if required, the auditor's report within six months after deregistration. Financial returns must be filed for:

  • the fiscal period in which the association became deregistered
  • any other fiscal period for which the association has not filed a return

Reporting deadlines for the registered association across its life cycle

After registration

6 months after registration

To Elections Canada:

  • Statement of Registered Association's Assets and Liabilities as of the day before registration

During the fiscal year

30 days after change in registry information

To Elections Canada:

  • General Form—Electoral District Association to report changes in contact information and new appointments
30 days after nomination contest

To Elections Canada:

  • General Form—Nomination Contest if the association (not the party) held the contest
May 31 each year

To Elections Canada:

  • Registered Association Financial Transactions Return
  • Auditor's report, if required1
  • General Form—Electoral District Association as an annual confirmation of registry information2

To Canada Revenue Agency:

  • Contributions to a Registered Party or to a Registered Association—Information Return

After deregistration

6 months after deregistration

To Elections Canada:

  • All oustanding:
    • Registered Association Financial Transactions Returns
    • Auditor's reports, if required1

1 An auditor's report is required if the registered association accepted contributions totalling $5,000 or more, or incurred expenses totalling $5,000 or more, in a fiscal period. Note that audit fees and transfers to or from affiliated political entities do not count toward the $5,000 threshold.

2 If the date falls within an election period, the deadline is July 31.

Role and appointment process—chief executive officer

Association's chief executive officer
Who is eligible? Yes/No
Anyone Yes

Appointment process

  • The association has to appoint a chief executive officer before applying for registration.
  • The association may have only one chief executive officer at a time.

Role summary

  • The chief executive officer is responsible for certifying the General Form—Electoral District Association, including when there is a change in the association's registry information.
  • The chief executive officer co-signs the registered association's application for deregistration.

Role and appointment process—financial agent

Association's financial agent
Who is eligible? Yes/No
Canadian citizen who is at least 18 years old Yes
Corporation incorporated under the laws of Canada or a province Yes
Person who is a member of a partnership that has been appointed as an auditor for a registered party Yes
Person who is a member of a partnership that has been appointed as an auditor for a political entity other than a registered party No
Candidate No
Election officer or member of the staff of a returning officer No
Undischarged bankrupt No
Auditor appointed as required by the Canada Elections Act No
Person who does not have the capacity to enter into contracts in the province or territory in which the person ordinarily resides (e.g. a dissolved corporation or a person with a diminished mental capacity) No
Any other person or group not mentioned above No

Appointment process

  • The association has to appoint a financial agent before applying for registration.
  • The financial agent has to sign a statement consenting to act in that capacity.
  • If for any reason the financial agent is no longer able to continue in that role, the association must appoint a new financial agent without delay and notify Elections Canada within 30 days. The notice has to include a signed consent from the new financial agent.
  • The association may have only one financial agent at a time.
  • Although it is not a legal requirement, 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.

Role summary

  • The financial agent is responsible for administering the association's financial transactions and reporting those transactions to Elections Canada as required by the Canada Elections Act.
  • The financial agent should open a bank account to be used exclusively for the registered association's finances.
  • The financial agent co-signs the registered association's application for deregistration.
  • After deregistration, the financial agent's role continues until the association fulfills all financial reporting requirements.

Role and appointment process—electoral district agents

Association's electoral district agents
Who is eligible? Yes/No
Canadian citizen who is at least 18 years old Yes
Corporation incorporated under the laws of Canada or a province Yes
Person who is a member of a partnership that has been appointed as an auditor for a registered party Yes
Person who is a member of a partnership that has been appointed as an auditor for a political entity other than a registered party No
Candidate No
Election officer or member of the staff of a returning officer No
Undischarged bankrupt No
Auditor appointed as required by the Canada Elections Act No
Person who does not have the capacity to enter into contracts in the province or territory in which the person ordinarily resides (e.g. a dissolved corporation or a person with a diminished mental capacity) No
Any other person or group not mentioned above No

Appointment process

  • The appointment of electoral district agents is optional.
  • The registered association may appoint any number of electoral districts agents at any time.
  • Within 30 days of appointing one or more agents, the registered association has to send Elections Canada a written report that:
    • lists the names and addresses of the new electoral district agents
    • specifies the terms and conditions of the appointments
    • includes the financial agent's signed declaration

Role summary

  • Electoral district agents may be authorized by the registered association to do one or more of the following:
    • accept contributions or loans on the association's behalf
    • issue contribution receipts, including tax receipts (if the party leader has authorized the association to issue tax receipts)
    • incur or pay the association's expenses
  • Authorized electoral district agents may share signing authority with the financial agent over the registered association's bank account.

Role and appointment process—auditor

Association's auditor
Who is eligible? Yes/No
Person who is a member in good standing of a corporation, an association or an institute of provincially incorporated professional accountants (CPA designation)* Yes
Partnership of which every partner is a member in good standing of a corporation, an association or an institute of provincially incorporated professional accountants (CPA designation)* Yes
Any candidate or official agent No
Election officer or member of the staff of a returning officer No
Chief agent of a registered party or an eligible party No
Registered agent of a registered party No
Electoral district agent of a registered association No
Leadership contestant, their financial agent or a leadership campaign agent No
Nomination contestant or their financial agent No
Financial agent of a registered third party No
Any other person or group not mentioned above No

Appointment process

  • The association has to appoint an auditor before applying for registration.
  • The auditor has to sign a statement consenting to act in that capacity.
  • If for any reason the auditor is no longer able to continue in that role, the association must appoint a new auditor without delay and notify Elections Canada within 30 days. The notice has to include a signed consent from the new auditor.
  • A registered association may have only one auditor at a time, but the same person can be the auditor for more than one registered association.

Role summary

  • If in a fiscal period the registered association receives contributions totalling $5,000 or more, or incurs expenses totalling $5,000 or more, the auditor has to examine the association's financial records and give an opinion in a report as to whether the annual return presents fairly the information contained in the financial records on which it is based.
  • The auditor has a right to access all documents of the association, and may require the financial agent to provide any information or explanation that is necessary to enable the auditor to prepare the report.

*Provincial and territorial auditing bodies may require auditors to meet other professional criteria in order to perform this role.

Limits on contributions, loans and loan guarantees

Limits on contributions, loans and loan guarantees
Political entity 2017 annual limit Limit per election called between Jan. 1, 2017 and Dec. 31, 2017
To each registered party $1,550* n/a
In total to all the registered associations, nomination contestants and candidates of each registered party $1,550* n/a
In total to all leadership contestants in a particular contest $1,550* n/a
To each independent candidate n/a $1,550*

Notes

  • The contribution limits apply to total contributions, the unpaid balance of loans made during the contribution period, and the amount of any loan guarantees made during the contribution period that an individual is still liable for. The sum of these three amounts cannot at any time exceed the contribution limit.
  • A nomination contestant is permitted to give an additional $1,000 in total per contest in contributions, loans and loan guarantees to their own campaign.
  • A candidate is permitted to give a total of $5,000 in contributions, loans and loan guarantees to their campaign.
  • A candidate is also permitted to give an additional $1,550* in total per year in contributions, loans and loan guarantees to other candidates, registered associations and nomination contestants of each party. (This includes contributions to the registered association in the candidate's electoral district and contributions to the candidate's own nomination campaign.)
  • A leadership contestant is permitted to give a total of $25,000 in contributions, loans and loan guarantees to their campaign.
  • A leadership contestant is also permitted to give an additional $1,550* in total per year in contributions, loans and loan guarantees to other leadership contestants.

*The limits increase by $25 on January 1 in each subsequent year.

Transfers—types and rules

This table shows the allowable monetary and non-monetary transfers between related registered political entities.

TO
FROM Nomination Contestant Leadership Contestant Candidate Registered Electoral District Association Registered Party
Monetary Non-monetary Monetary Non-monetary Monetary Non-monetary Monetary Non-monetary Monetary Non-monetary
Nomination Contestant No No No No YesNote 1 No YesNote 2 No Yes No
Leadership Contestant No No No No No No Yes No Yes No
Candidate YesNote 3 YesNote 3 No No NoNote 4 NoNote 4 Yes Yes Yes Yes
Registered Electoral District Association No YesNote 5 No YesNote 5 YesNote 6 Yes Yes Yes Yes Yes
Registered Party No YesNote 5 NoNote7 YesNote 5 YesNote 6 Yes YesNote 8 YesNote 8 n/a n/a

Note 1 A nomination contestant may transfer funds (but not property or services) to a candidate of the same party in the electoral district in which the nomination contest was held.

Note 2 A nomination contestant can only transfer funds to the registered electoral district association that held the nomination contest.

Note 3 Candidates may transfer property, services and funds to their own nomination contestant campaign for the same election.

Note 4 Candidates in a superseded by-election may transfer property, services and funds to their campaign for the general election.

Note 5 Non-monetary transfers must be offered equally to all contestants.

Note 6 Monetary transfers other than trust funds are allowed. After election day, monetary transfers are allowed only to pay claims and loans related to the candidate's campaign.

Note 7 Directed contributions are the only exception: they may be transferred to the leadership contestant.

Note 8 Registered parties may transfer property, services and funds to electoral district associations, whether registered or not.


Note: Independent candidates may not send or accept transfers of funds, property or services to or from other political entities.

Important reminders for registered associations, financial agents and electoral district agents

Do Don't
  • Appoint a financial agent, who is involved in all budgeting and financial decisions of the registered association.
  • Appoint an auditor who is accredited under provincial law to perform accounting services (CPA designation).
  • Ensure that only the financial agent or authorized electoral district agents accept contributions.
  • Ensure that only the financial agent or authorized electoral district agents incur or pay expenses.
  • Ensure that only the financial agent accepts or makes transfers on behalf of the association.
  • Issue receipts for each contribution over $20.
  • For any expense of $50 and over, keep a copy of the invoice and proof of payment. For any expense of less than $50, keep proof of payment plus a record of the nature of the expense.
  • Report net contributions received from ticketed fundraising events (ticket price less the fair market value of the benefit received by each attendee).
  • Report monetary and non-monetary transfers received or sent to other political entities.
  • In the Statement of Registered Association's Assets and Liabilities, ensure that the "Opening balance" under the "Net assets" is equal to the "Ending balance" from the previous fiscal period.
  • Report all changes in registry information within 30 days of the change.
  • Submit the General Form—Electoral District Association to confirm or change registry information by May 31 each year. If a federal election is in progress in the association's electoral district on that date, the deadline is July 31.
  • Submit the Registered Association Financial Transactions Return by May 31 each year.
  • Allow the auditor sufficient time before the submission deadline to review the financial documents and prepare the audit report (auditor's report is required if contributions or expenses, not including transfers to affiliated political entities, total $5,000 or more).
  • Ensure that the current financial agent signs the declaration on the financial return and that the agent has been listed as the financial agent on record with Elections Canada.
  • Submit the Contributions to a Registered Party or to a Registered Association—Information Return to the Canada Revenue Agency by May 31 each year.
  • Submit the General Form—Nomination Contest within 30 days of the contest selection date for any contest held by the registered association.
  • Do not transmit election advertising or incur expenses for election advertising that would be transmitted during the election period.
  • Do not incur electoral campaign expenses on behalf of a candidate without the written authorization of the candidate's official agent.
  • Do not accept contributions:
    • from any source other than an individual who is a Canadian citizen or a permanent resident of Canada
    • that exceed an individual's contribution limit
    • in cash that exceed $20
  • Do not accept loans from any source other than a financial institution, the registered party, a registered association of the registered party, or an individual who is a Canadian citizen or a permanent resident of Canada.
  • Do not accept loan guarantees from any source other than the registered party, a registered association of the registered party, or an individual who is a Canadian citizen or a permanent resident of Canada.
  • Do not accept a loan or loan guarantee from an individual if it exceeds the individual's contribution limit.
  • Do not issue tax receipts unless the financial agent has been authorized to do so in writing by the leader of the registered party.
  • Do not issue tax receipts for non-monetary contributions.
  • Do not transfer funds to candidates after election day except to pay a claim related to the candidate's campaign.
  • Do not transfer funds to leadership or nomination contestants.
  • Do not provide property or services to leadership or nomination contestants unless they are offered equally to all contestants in a particular contest.