Political Financing Handbook for Candidates and Official Agents (EC 20155) – July 2021
14. Working with Other Entities
This chapter discusses how transactions are regulated when the candidate's campaign engages in shared activities or shares expenses with other candidates, a registered association or the registered party. It covers the following topics:
- Shared expenses
- Prohibition on transferring expenses
- Property or services provided by the party or registered association
- Typical shared activities (leader's tour; campaigning by parliamentarians or another candidate; use of the registered association's resources)
Campaigns might decide to share the expenses of certain activities 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 activity 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.
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 that it incurred for property and services used to promote that entity in the campaign.
Property or services provided by the party or registered association
Candidates may receive property or services from their registered party or a registered association of the party, such as signs and riding service packages. These can be received as non-monetary transfers or can be paid by the candidate's campaign.
If the property or service is being paid by the candidate's campaign, 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.
For details on property or services already in place, including used signs and existing websites, see the Use of parliamentary resources and other existing resources section in Chapter 8, Election Expenses.
- 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 supplier invoice from Signs Inc. for $1,500, as well as an invoice from the party for $1,500.
- The registered party creates a web page on its site for each candidate. The commercial value of creating the web pages is $150 per candidate. Each candidate has to report a non-monetary transfer and an expense of $150.
Typical shared activities
The following are examples of typical activities where various entities work together and might share 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.
Note: If a leader attends a candidate event unrelated to the leader's tour, the expenses are those of the candidate, not of the party. Any incremental expenses incurred by the leader to attend such an event are reported as a transfer from the party to the candidate's campaign.
The leader's tour has planned stops in Toronto and Ottawa on Thursday and Friday. A candidate asks the party leader to join an event in Hamilton on Thursday night. The incremental expenses for the party leader to attend the Hamilton event, such as added travel expenses, are a transfer from the party to the candidate's campaign.
Campaigning by parliamentarians or another candidate
If a federal or provincial parliamentarian 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 or a person authorized in writing by the official agent.
See High-profile campaigners and invited guests in Chapter 8, Election Expenses.
Use of the 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.
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:
- less than its own rental cost for the period, the difference is a non-monetary transfer from the association
- more than its own rental cost for the period, the difference is a monetary transfer from the candidate
For the use of its capital 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 capital assets, the commercial value of renting similar assets for the same period is a non-monetary transfer from the association.
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.
Use of the 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 and counts toward the combined limit for contributions to registered associations, candidates and nomination contestants
- the association issues the receipt and transfers the contribution amount to the candidate's campaign
- the official agent reports the amount as a transfer from the association
Keep in mind that the registered association's website is an election expense of the candidate if it remains online during the election period. See Websites and web content in Chapter 8, Election Expenses, for more information.
Use of the registered party's online contribution system
The registered party may set up a system on its website to collect online contributions to candidates, acting only as an intermediary.
If a contribution to the candidate is processed through the party website:
- the contribution is made to the candidate and counts toward the limit for contributions to candidates, not to the registered party
- the party sends the contribution amount, less the actual fees charged by the payment processing company, to the candidate's campaign (the party cannot deduct any additional amount)
- the party also sends supporting documents that show the contributor's name, contribution amount, date the contribution was made, and so on
- the official agent reports the full amount given as a contribution from the individual and issues a receipt
- the official agent reports the processing fee as an other electoral campaign expense
Bernice makes a $50 contribution to a candidate using the registered party's online contribution system. The payment processing company charged a $1 transaction fee, so the registered party sends the candidate's campaign $49 and details about the contribution. The official agent records a contribution of $50 from Bernice and an other electoral campaign expense of $1. The official agent issues a receipt to Bernice for $50, keeping in mind that the receipt is only valid for tax purposes if the contribution was made after the candidate was confirmed and no later than election day.
For a detailed discussion of this topic, please refer to Elections Canada's interpretation note 2018-06, Online Contributions Made to Candidates Through the Registered Party, on the Elections Canada website.