Political Financing Handbook for Nomination Contestants and Financial Agents (EC 20182) – June 2019
Note: This handbook is to be used for contests called on or after June 13, 2019. For earlier contests, please use the December 2018 version of the handbook..
12. Other Nomination Campaign Expenses
This chapter discusses nomination campaign expenses other than nomination contest, personal, travel and living, and litigation expenses. It provides examples of typical expenses in this category. It covers the following topics:
- What are "other" nomination campaign expenses?
- Nomination contest fees
- Compensation paid to the contestant
- Fundraising expenses
- Unused inventory
- Interest on loans before and after the contest period
- Auditor's fees
- Cost of preparing reports
What are "other" nomination campaign expenses?
Certain nomination campaign expenses that are reasonably incurred as an incidence of the contest are not to be included as nomination contest expenses or any other specific category of expense, and are not subject to the expenses limit. These expenses are called "other" nomination campaign expenses.
Property or services used before or after the nomination contest
Expenses for property or services used before or after the nomination contest are only nomination campaign expenses to the extent that they were incurred as an incidence of the contest.
When property or a service is used before the contest start date, the campaign should ask: if the contestant was not planning to participate in a future contest, would the expense have been incurred? If the answer is no, and the expense is not a personal expense (see Chapter 9) or a travel and living expense (see Chapter 10), then it is an other nomination campaign expense.
When property or a service is used after the selection date, the campaign should ask: did the expense reasonably serve some purpose related to the contest? If the answer is yes, and the expense is not a personal expense (see Chapter 9), a travel and living expense (see Chapter 10) or a litigation expense (see Chapter 11), then it is an other nomination campaign expense.
Note: The contest start date and selection date are indicated in the nomination contest report provided by the registered association or the registered party that held the contest.
- The campaign rents an office on March 1, two weeks before the contest period starts. The selection date is April 30. The rental agreement is for two months and the rent is $300 a month. The nomination contest expense to be recorded is the rent for the month of April, plus the rent for 17 days in March: $300 + (17 / 31 x $300) = $464.52. The remaining amount, $135.48, is recorded as an other nomination campaign expense.
- After the selection date, the contestant invites volunteers to a thank-you party. Although the event is outside the nomination contest period, the expense is incurred as an incidence of the nomination contest. Accordingly, the expense has to be reported as an other nomination campaign expense.
Who can incur and pay "other" nomination campaign expenses?
The financial agent and the nomination contestant can incur other nomination campaign expenses.
Only the financial agent is allowed to pay other nomination campaign expenses, other than petty expenses paid from the petty cash with the financial agent's written authorization.
Typical "other" expenses
Nomination contest fees
Nomination contestants might be required to pay a contest entry fee to the registered party or the registered association organizing the contest. These fees are other nomination campaign expenses.
Note: When a refundable compliance deposit is required, it is recorded as a transfer to the registered party or association rather than as an expense. If the deposit is refunded to the contestant, it is recorded as other cash inflow rather than as a transfer back to the contestant.
Compensation paid to the contestant
Reasonable compensation may be paid to the nomination contestant from the campaign bank account. It is an other nomination campaign expense.
It is advisable to include a written contract or other documentation with the contestant's return about any compensation paid because, in the absence of evidence, the payment of salaries may be considered an inappropriate use of campaign funds that would need to be returned.
Some fundraising expenses are other nomination campaign expenses rather than nomination contest expenses, even if the fundraising takes place during the contest period. See Fundraising expenses in Chapter 6, Fundraising, for more information.
Note: Expenses associated with the production and distribution of advertising and promotional materials related to a fundraising activity are nomination contest expenses to the extent that the advertising and promotional materials are used during the contest period.
The campaign holds a ticketed fundraising dinner during the contest period. The expenses incurred for the venue rental, food, drinks and entertainment are other nomination campaign expenses. The expenses incurred to promote the event are nomination contest expenses.
Interest on loans before and after the contest period
Interest accrued on loans before and after the contest period is an other nomination campaign expense.
After the contest, the nomination contestant's campaign may have promotional items that were never used during the contest period and remain in inventory.
The expense for these unused items is not a nomination contest expense but an other nomination campaign expense. This is the case except for unused signs promoting the contestant, which are always treated as nomination contest expenses.
Unused inventory should be sold at commercial value. The funds are then transferred to the candidate in the electoral district, the registered party or the registered association that held the contest.
During the contest period, 18,000 flyers are distributed and 2,000 remain in the campaign office unused. The purchase price of the 2,000 flyers is reported as an other nomination campaign expense.
The nomination contestant's auditor will receive a subsidy from Elections Canada, paid directly to the auditor. If the auditor's subsidy is less than the total fee charged by the auditor, the difference is an other nomination campaign expense, and the contestant's campaign is responsible for paying the remaining amount.
Once Elections Canada receives the Nomination Contestant's Campaign Return, auditor's report and auditor's invoice, and once it has reviewed the contestant'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 $2,193* or 3% of the contestant's nomination contest expenses—whichever is less
- a minimum of $365.50*
*These amounts have been adjusted for inflation from the base amounts of $1,500 and $250. They are in effect for contests with a selection date between April 1, 2019, and March 31, 2020.
The financial agent submits the auditor's invoice for $500 with the Nomination Contestant's Campaign Return and other required documents. The total amount of the contestant's nomination contest expenses is $10,200. The auditor is entitled to receive 3% of that amount as a subsidy payment. However, 3% of $10,200 ($306) is less than the minimum amount payable. Accordingly, Elections Canada will authorize payment of the minimum amount of $357.25.
The financial agent pays the remaining $142.75 to the auditor from campaign funds and reports the amount as an other nomination campaign expense.
Note: The subsidy is provided only when an audit of the contestant's financial return is required by the Canada Elections Act. See Chapter 13, Reporting, for the conditions under which an audit is required.
Cost of preparing reports
Expenses associated with fulfilling the various reporting obligations set out in the Canada Elections Act are other nomination campaign expenses.
The expense for a courier service used one month after the selection date to send the contestant's return has to be reported as an other nomination campaign expense.