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Political Financing Handbook for Candidates and Official Agents (EC 20155) – July 2021

4. Transfers

This chapter explains the rules and procedures for accepting and sending transfers. It covers the following topics:

  • What is a transfer?
  • What cannot be transferred?
  • Administering transfers sent to and by the campaign
  • Rules for independent candidates

What is a transfer?

A transfer is a provision of funds, property or services between specified political entities of the same political affiliation. Where specifically permitted under the Canada Elections Act, a transfer is not considered to be a contribution, and contribution rules therefore do not apply.

Monetary transfer Non-monetary transfer
A monetary transfer is a transfer of funds. A non-monetary transfer is a transfer of property or services. The amount of a non-monetary transfer is the commercial value of the property or service.

Unlike non-monetary contributions from individuals not in the business of providing that property or service, a non-monetary transfer has to be reported even if its commercial value is $200 or less.

Transfers are permitted only between related political entities (registered party, electoral district association, candidate and leadership or nomination contestant) of the same political affiliation.

However, not all types of entities are authorized to provide all types of transfers. For a quick reference guide to eligible and ineligible transfers, see the Transfers—types and rules table in Chapter 1, Reference Tables and Timelines.

Note: If an invoice requiring payment is prepared by one political entity and sent to its related political entity, together with the original supplier invoice representing the commercial value of the goods or services provided, this is not a transfer but a sale of goods or services from one entity to another.

Transfers of expenses are prohibited

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 it incurred for property and services it used during the electoral campaign.

Transfers sent to the candidate's campaign

The following transfers may be accepted by the candidate's campaign:

  • property, services or funds from the registered party or any registered association of the registered party
  • funds from a nomination contestant who participated in the nomination contest in the same electoral district, including funds from the candidate's own nomination campaign

Note: Transfers may not be accepted from provincial parties or electoral district associations of provincial parties. Transfers from a registered provincial division of a federal registered party are considered transfers from the registered party.

Transfers before an election

The registered party or registered association may transfer funds, property or services to the candidate before the election is called provided the following conditions are met:

  • the candidate has appointed an official agent
  • in the case of monetary transfers, the official agent has opened a campaign bank account

Transfers after an election

No registered party, registered association or nomination contestant may transfer funds to a candidate after election day, except to pay claims or loans related to the candidate's electoral campaign.

Therefore, it is important to verify whether a transfer is needed before accepting it.

Transfers sent by the candidate's campaign

The following transfers may be sent by the candidate's campaign:

  • property, services or funds to their own nomination contestant campaign for the same election
  • property, services or funds to a registered electoral district association of the same party or to the registered party
Examples
  1. Clara won a nomination contest and has started her election campaign. Her official agent transfers funds to Clara's earlier nomination campaign to pay some outstanding nomination campaign expenses.
  2. The candidate's campaign purchases 1,000 signs for the election. During the election period, 900 signs are installed. After election day, 100 never installed signs and 750 recovered signs are transferred to the registered association. The commercial value of the 850 transferred signs is calculated, and the amount is reported as a transfer to the association.

Irregular transfers

When the candidate's campaign sends or accepts a transfer that is not permitted under the Canada Elections Act, the consequences will depend on the sender, recipient and transfer type.

The tables below deal with irregular transfers between affiliated political entities only.

Irregular transfers sent by the candidate's campaign

Recipient of irregular transfer sent by candidate Transfer type Consequence
Candidate, other than own campaign for superseded or cancelled election Monetary
Non-monetary, until election day
Improper surplus disposal with offence for sender; not a contribution
Candidate, other than own campaign for superseded or cancelled election Non-monetary, after election day If capital asset, improper surplus disposal with offence for sender; not a contribution*
Nomination contestant, other than own campaign for same election Any Illegal contribution**
Leadership contestant Any Illegal contribution**

*Remaining non-capital assets or services can be provided to another candidate, but they must either be sold to the campaign or contributed by the candidate as a personal non-monetary contribution.

**If the transfer is non-monetary and the candidate offered it equally to all contestants, it is not a contribution. It may be an improper surplus disposal.

Example

During an election period, a candidate's campaign sends funds to another candidate's campaign of the same party in an adjacent riding. This is not an allowable transfer, though it could have been accomplished legally by using the registered party or a registered association as an intermediary. The transaction results in an improper surplus disposal that will need to be corrected during or after the election.

Irregular transfers sent to the candidate's campaign

Sender of irregular transfer accepted by candidate

Transfer type

Consequence

Nomination contestant in same electoral district Monetary, after election day other than to pay claims Prohibited transfer with offence for sender; not a contribution
Nomination contestant in other electoral district
Leadership contestant
Monetary Improper surplus disposal with offence for sender; not a contribution
Nomination contestant
Leadership contestant
Non-monetary If capital asset, improper surplus disposal with offence for sender; not a contribution*
Candidate, other than to own campaign for superseded election Monetary
Non-monetary, until election day
Improper surplus disposal with offence for sender; not a contribution
Candidate, other than to own campaign for superseded election Non-monetary, after election day* If capital asset, improper surplus disposal with offence for sender; not a contribution*

*Remaining non-capital assets or services can be provided to the candidate, but they must either be sold to the campaign or contributed by the contestant or other candidate as a personal non-monetary contribution.

Example

Portia is a candidate. Her electoral campaign accepts a video from her earlier nomination campaign to reuse in the election period. This is not an allowable transfer. Portia's electoral campaign must buy the video from the nomination campaign at its commercial value or accept the video as a personal non-monetary contribution from Portia (if she stays within the $5,000 limit on contributions to her own electoral campaign).

OGI reference

For a detailed discussion of this topic, please refer to Elections Canada's interpretation note 2020‑07, Irregular Transfers Between Affiliated Political Entities, on the Elections Canada website.

Independent candidates

An independent candidate may not send or receive any transfers. Any property, services or funds received by an independent candidate, other than to pay personal expenses (see Chapter 9) or litigation expenses (see Chapter 11), are governed by the rules for contributions and loans.