Political Financing Handbook for Nomination Contestants and Financial Agents (EC 20182) – October 2021
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?
- Who can incur and pay ďotherĒ nomination campaign expenses?
- Typical "other" expenses (contest fees, compensation paid to the contestant, fundraising expenses, unused inventory, loan interest outside the contest period, auditor's fees, preparing reports and replacing damaged property)
What are "other" nomination campaign expenses?
Some nomination campaign expenses, which are reasonably incurred as an incidence of the contest, do not fit into any specific expense category. They are called "other" nomination campaign expenses and are not subject to a limit.
Property or services used before or after the nomination contest
Expenses for property or services used before or after the nomination contest are nomination campaign expenses if they were incurred as an incidence of the contest. Some expenses are not part of the campaign at all. The table below can help a campaign decide how to categorize an expense.
|Property or services used before the contest period starts||Property or services used after the selection date|
The campaign should ask:
If the contestant had not planned to participate in a future contest, would the expense still have been incurred?
If yes, there is no nomination campaign expense to report.
If no, then there is a nomination campaign expense to report. If the expense is not a:
then it is an other nomination campaign expense.
The campaign should ask:
Was the expense reasonably incurred because of the contest?
If no, there is no nomination campaign expense to report.
If yes, then there is a nomination campaign expense to report. If the expense is not a:
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. This fee is an other nomination campaign expense.
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. 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.
A nomination contestant's campaign that needs to file an auditor's report will receive a subsidy for audit fees. Elections Canada pays the subsidy directly to the auditor once it has:
- received the Nomination Contestant's Campaign Return, auditor's report and a copy of the auditor's invoice
- reviewed the contestant's return
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 $2,253* or 3% of the contestant's nomination contest expensesówhichever is less
- a minimum of $375.50*
*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, 2021, and March 31, 2022.
Note: If the auditorís subsidy is less than the total fee charged by the auditor, the difference is an other nomination campaign expense, and the contestantís campaign is responsible for paying the remaining amount.
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 contestantís nomination contest expenses is $7,200. The auditor is entitled to receive 3% of that amount as a subsidy payment. However, 3% of $7,200 ($216) is less than the minimum amount payable. Accordingly, Elections Canada will authorize payment of the minimum amount of $375.50.
The financial agent pays the remaining $124.50 to the auditor from campaign funds and reports the amount as an other nomination campaign expense.
Preparation of 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.
Replacement or repair of damaged property
A nomination contestantís campaign might incur unanticipated expenses during a contest period because of property damage, whether to a campaign vehicle or office equipment. The expenses to repair property, or to obtain an equivalent replacement for the property or for the service it provided, are other nomination campaign expenses rather than nomination contest expenses. This is because the repair or replacement is not being used to promote the contestant beyond the original expense.
If the replacement has upgraded features that are used to further promote the contestant and has a higher commercial value than the original property, then the difference needs to be reported as a nomination contest expense.
The contestantís campaign buys tablets for use during the contest period at a cost of $150 each. One tablet breaks when it falls off a desk and can no longer be used. The campaign purchases an exact replacement at a cost of $175. The original expense of $150 is a nomination contest expense. The second expense of $175 is an other nomination campaign expense, which is not subject to the spending limit.