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

7. Working with Other Entities

This chapter discusses how transactions are regulated when the registered association engages in shared activities, shares its resources or acts on behalf of another political entity, especially the candidate during an election. It covers the following topics:

Property or services provided to another political entity

The registered association may provide property or services to the registered party, another registered association, a candidate, a nomination contestant or a leadership contestant. The property or services can be sent as non-monetary transfers or can be paid by the other political entity.

If the property or service is being paid by the other political entity, a copy of the original supplier invoice as well as the invoice from the association must be sent to that other entity. The documentation should confirm the amount reported in the financial returns.

See Chapter 4, Transfers, for more information on rules and restrictions.

Examples
  1. The registered association purchases signs from Signs Inc. for $1,500 and resells them to the candidate's campaign for $1,500. The association has to send the candidate a copy of the original invoice from Signs Inc. for $1,500 as well as an invoice from the association for $1,500.
  2. The registered association creates a web page on its site for each nomination contestant. The commercial value of creating the web pages is $150 per contestant. Each nomination contestant has to report a non-monetary transfer and an expense of $150.

Conducting election advertising on behalf of a candidate or the party

Election advertising

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

Note: During an election period, the registered association is prohibited from transmitting election advertising or incurring expenses for election advertising.

Election advertising on behalf of a candidate or the party

The registered association can conduct election advertising only if it is done on behalf of a candidate or the party, and if it receives prior written authorization from the candidate's official agent or a registered agent of the party. This authorization must be mentioned in or on the message.

A copy of the original supplier invoice for the election advertising activity must be sent to the candidate or party. The expenses incurred for advertising conducted during the election period, including the cost of production and distribution, are to be reported as election expenses in the candidate's or party's return.

Typical shared communications and advertising

Traditional election advertising

Advertisements distributed through traditional means such as signs, billboards, flyers, pamphlets, radio, television, newspapers or magazines during an election period are election advertising and have to be authorized by a registered agent of the party or by the candidate's official agent.

Example

After an election is called, the financial agent of the registered association obtains the official agent's written authorization to purchase and distribute signs promoting the candidate. The financial agent has to send a copy of the original supplier invoice to the candidate's campaign. These expenses are election expenses of the candidate. In addition, the official agent's authorization must be mentioned on the signs.

Used signs

The registered association may have in its possession signs used in a previous election. If the candidate or party reuses these signs in a second or subsequent election, the current commercial value of equivalent signs has to be recorded as a non-monetary transfer to the political entity receiving the signs. Transfer rules apply to these transactions.

Billboards

The commercial value, including design, production and installation, of any pre-existing billboards promoting the candidate that remain in place during the election period are election expenses. Billboards include the sign and the supporting structure. Elections Canada will accept the commercial value of an equivalent sign that would be temporarily installed just for the election period.

Similarly, with respect to the supporting structure, Elections Canada will accept the commercial value of an equivalent structure that would typically be used for an election period rather than the commercial value of a structure designed to be more permanent in nature. Note that the commercial value of the structure is the lower of its purchase price or its rental cost for the length of the election period.

Example

The registered association is renting a billboard that promotes the party and the member of Parliament from the riding. The expenses are reported in the association's annual financial return. When a federal election is called and the member of Parliament runs for re-election, the association plans to keep the billboard up to promote the incumbent candidate. The candidate's official agent has to authorize the expenses of the billboard, including the design, installation and rental expenses, and report them as election expenses in the candidate's return.

Election advertising on the Internet

Election messages communicated over the Internet are election advertising only if:

Any other messages communicated over the Internet are not election advertising.

If the registered association conducts any election advertising on behalf of a candidate or party, the official agent's or a registered agent's prior written authorization must be obtained and mentioned in or on the advertisement. Where the authorization statement cannot be included on the advertising message because of its size, this is acceptable if the statement is made immediately apparent to the viewer by following the link in the advertising message.

For greater certainty, the following are not election advertising:

Examples
  1. During the election period, the registered association would like to post a video promoting the candidate on YouTube. There is no placement cost to post the video, so it is not considered election advertising. However, because the production cost for the video would be an election expense of the candidate, the association has to obtain prior written authorization from the candidate's official agent to post the video.
  2. The association would like to hire a media firm to place banners promoting the candidate on social media platforms during the election period, directing users to a video on YouTube. Because the banners have a placement cost and promote the candidate, they are election advertising. The association has to obtain prior written authorization from the candidate's official agent, and this authorization must be mentioned on the banners. The financial agent has to send a copy of the original supplier invoice to the candidate's campaign. These expenses are election expenses of the candidate.
OGI reference

For a detailed discussion of this topic, please refer to Elections Canada's interpretation note 2015-04, Election Advertising on the Internet, on the Elections Canada website.

Registered association's existing website

If the registered association's pre-existing website stays online during the election period, this is not election advertising, but its commercial value—including design, maintenance and hosting—is an election expense of the candidate whom the website promotes.

For this reason, the candidate's official agent must approve this transfer from the association to the campaign. If the official agent does not wish to have this expense count toward the candidate's election expenses limit, the website must go offline during the election period.

Elections Canada will accept the current commercial value of an equivalent website as the commercial value of a pre-existing website.

Fundraising for a candidate during an election period

If a registered association organizes a fundraising activity during an election period to raise funds for a candidate's campaign, the promotion of the event is election advertising.

Prior to incurring election expenses on behalf of the candidate, the financial agent of the registered association must receive written authorization from the candidate's official agent. In addition, since this is an election advertising expense, the official agent's authorization also has to be mentioned in or on the promotion—for example, "Authorized by the official agent of John Smith."

The registered association must send a copy of the original supplier invoice for the advertising expense to the candidate's campaign. The candidate's campaign must report the amount as an election expense.

Example

During an election period, the registered association is planning a fundraising event to collect contributions for the candidate's campaign. The financial agent obtains the official agent's written authorization to incur expenses for advertising the event, and the association creates flyers and distributes them in the riding. After the event, the financial agent sends an invoice from the registered association and a copy of the original supplier invoice to the candidate's campaign for the expenses incurred for designing, printing and distributing the flyers. The official agent reports the invoiced amount as an election expense.

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:

Before incurring expenses for voter contact calling services, the registered association must obtain authorization from the chief agent, the official agent or the financial agent of the political entity the services are to be acquired for. The registered association must send an invoice, including a copy of the original supplier invoice, to the registered party, the candidate or the nomination contestant.

Expenses incurred for voter calls conducted during the election period, including the cost of production and distribution, have to be reported as election expenses (or nomination campaign expenses) by the entity the services were acquired for.

Note: If a registered association provides voter contact calling services to a nomination contestant, the service must be offered equally to all nomination contestants.

Note: A registered association must register with the Canadian Radio-television and Telecommunications Commission (CRTC) if it uses a calling service provider or automatic dialing-announcing device to make voter calls. Refer to the CRTC's Voter Contact Registry web page for details.

OGI reference

For a detailed discussion of this topic, please refer to Elections Canada's interpretation note 2015-11, Application of Election Advertising Rules to Telephone Calls, on the Elections Canada website.

Holiday greeting cards

Registered associations might choose to distribute greeting cards during a holiday season. If the greeting cards are distributed during an election period, they are election advertising and can be sent only on behalf of the candidate or the party. Prior written authorization from the official agent, chief agent or a registered agent must be obtained and mentioned in or on the advertisement.

If the greeting cards are in transit on the day the election is called and the registered association does not have the ability to stop their delivery, they will not be considered election advertising even though the actual delivery will take place during the election period. However, any greeting cards distributed in the 36 days preceding a fixed date election will be considered election advertising.

Typical shared resources

The following are examples of typical situations where the registered association and candidate might share resources and expenses.

Registered association's office and assets

The candidate's campaign may use the registered association's office and assets during the election period. Their use is an election expense of the candidate.

For the use of its office, the registered association must send an invoice to the candidate's campaign together with the association's original rental agreement.

If the registered association charges:

For the use of its assets (computers, printers, etc.), the association must send an invoice equivalent to the commercial value of renting similar assets for the same period.

If the registered association does not charge for the use of its assets, the commercial value of renting similar assets for the same period is a non-monetary transfer from the association.

Example

The registered association rents office space all year. During the election period, the candidate sublets the office and uses it as a campaign office. The registered association sends an invoice to the candidate's campaign for the rent calculated for the election period. The rent paid by the candidate is an election expense of the candidate. The registered association has to report the income in its financial statement at the end of the fiscal year.

Registered association's online contribution system

The candidate's campaign might use the registered association's website to process online contributions, since associations often already have the necessary resources in place.

If a contribution is processed through the registered association's website to the association's bank account, the contribution is made to the registered association. The association issues the receipt and transfers the contribution amount to the candidate's campaign.

Keep in mind that the registered association's website is an election expense of the candidate if it stays online during the election period. See Registered association's existing website earlier in the chapter for more information.