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Political Financing Handbook for Nomination Contestants and Financial Agents (EC 20182) – October 2021

8. Nomination Contest Expenses

This chapter explains what nomination contest expenses are, describes how limits are calculated and applied, and gives examples of typical nomination contest expenses. It covers the following topics:

  • What are nomination contest expenses?
  • Who can incur and pay nomination contest expenses?
  • Limits on nomination contest expenses
  • Typical nomination contest expenses (advertising expenses, Internet communications, voter outreach, and expenses related to the campaign office and workers)
  • Use of parliamentary resources (staff and websites)

What are nomination contest expenses?

A nomination contest expense is:

  • any cost incurred or non-monetary contribution received by a nomination contestant to the extent that the property or service that the cost was incurred for, or that was received as a non-monetary contribution, is used to directly promote or oppose a nomination contestant during a nomination contest
  • any non-monetary transfer received from a registered party or a registered association of the registered party to the extent that the property or services are used to directly promote or oppose a nomination contestant during a nomination contest

The concept of "directly promoting or opposing a nomination contestant" is not limited to advertising. It is to be understood broadly and includes expenses for running a campaign, such as office rental, telecommunication services, etc.

This means that most expenses reasonably incurred for property or a service used during the contest period are nomination contest expenses, unless they:

The nomination contest period starts on the contest start date and ends on the selection date as indicated in the nomination contest report provided by the registered association or the registered party that held the contest.

Who can incur and pay nomination contest expenses?

The financial agent and the nomination contestant can incur nomination contest expenses.

Only the financial agent is allowed to pay nomination contest expenses, other than petty expenses paid from the petty cash with the financial agent's written authorization.

Limits on nomination contest expenses

The Canada Elections Act imposes a limit on nomination contest expenses to facilitate a level playing field among contestants.

The limit applies to each contestant's nomination contest expenses in the electoral district in which they are seeking the party's endorsement. The limit applies to the total of all nomination contest expenses, whether paid, unpaid, or accepted as non-monetary contributions or transfers.

The nomination contestant and the financial agent have to respect the nomination contest expenses limit. They cannot enter into contracts or incur nomination contest expenses that exceed the limit.

It is highly advisable to agree on an expense approval process; this will help ensure that the nomination contestant and the financial agent are informed and co-operate when incurring expenses. An expense approval process and a campaign budget created at the beginning of the campaign help to manage finances effectively.

How are the limits calculated?

The limit allowed for a nomination contestant in an electoral district is:

  • 20% of the limit that was allowed for a candidate's election expenses during the last general election in that electoral district (excluding any increase for a longer election period), or
  • in any other case, the amount determined by Elections Canada

The registered party or registered association holding the nomination contest informs the contestants about the nomination contest expenses limit. The information is also available on the Elections Canada website in the Political Participants section.

Note: The Canada Elections Act does not provide for a reimbursement of nomination contest expenses.

Typical nomination contest expenses

The following are examples of typical nomination contest expenses.

Advertising expenses

General rule

Advertising is the transmission to the public of an advertising message promoting or opposing a nomination contestant.

Expenses incurred for advertising conducted during the nomination contest period, including the cost of production and distribution, are to be reported as nomination contest expenses.

Examples
  1. The financial agent purchases flyers before the contest starts and mails them to party members in the riding during the contest period to promote the contestant. The expense for the flyers—including their design, printing and distribution—is a nomination contest expense.
  2. The contestant's campaign hires a media firm to place banners on websites and social media platforms during the contest period, directing users to a video posted on YouTube. The placement cost for the banners is a nomination contest expense, together with all expenses related to designing and developing the video.

Pre-election period: partisan advertising and information to be held in an online registry

Nomination contests will sometimes take place in the pre-election period of a fixed-date general election, starting from June 30 until the election period begins. A nomination contestant's advertising during that period may fall into the category of partisan advertising.

Partisan advertising is the transmission to the public during the pre-election period of an advertising message that promotes or opposes the election of a nomination contestant. Advertising is not partisan advertising if it promotes or opposes a contestant only by taking a position on an issue with which the contestant is associated. However, it will be partisan advertising if the ad promotes or opposes the contestant in any other way, including by showing a logo or linking to a web page that identifies the contestant.

If conducted online, partisan advertising may be subject to registry requirements.

Regulated online platforms (that is, websites or applications that meet certain criteria for monthly visitors or users) have to maintain a registry of political advertising.

When a nomination contestant's campaign purchases partisan advertising online, to make sure it complies with the law, it should:

  • inform the platform that it is conducting political advertising
  • ask if the platform is regulated by the rules in the Canada Elections Act and needs information for its registry (unless the platform has already made this clear)

If the platform is regulated, the campaign must provide it with:

  • an electronic copy of the advertisement
  • the name of the financial agent who authorized its distribution on the platform

The platform must publish this information in its registry from the day the ad runs until two years after election day.

Note: If the campaign pays a social media influencer to post a partisan advertising message on the influencer's account in a pre-election period, the advertising does not have to be captured in an online platform registry.

Websites and web content

Nomination contestants often create websites and social media accounts specifically for their campaigns, either during or in the lead up to a contest. Pre-existing websites and social media accounts might also be used to promote the contestant during the contest period.

The following table shows when a website or web content that remains online during the contest period is a nomination contest expense, taking into account the purpose of the material.

Type of website or web content Nomination contest expense

Campaign's website and social media accounts

The expenses incurred for the campaign website itself—including its design, hosting and maintenance—are nomination contest expenses.

Expenses to produce and distribute content on the website or social media accounts are also nomination contest expenses. Because the site and accounts exist for the purpose of the campaign, all content that is online during the contest period counts as a nomination contest expense, regardless of when it was posted.

If content was produced entirely or in part using volunteer labour, only the actual expense incurred by the contestant is a nomination contest expense. This may include materials, equipment rental or paid labour.

Contestant's personal website and social media accounts

A contestant's pre-existing personal website is a nomination contest expense if it is used for the purpose of the campaign. Elections Canada will accept the current commercial value of an equivalent website as the commercial value of a pre-existing website.

Expenses to produce and distribute content on the website or social media accounts for the purpose of the campaign are also nomination contest expenses. Pre-existing content is only an expense if it was posted for the purpose of the campaign or promoted during the campaign.

The expenses are also non-monetary contributions from the contestant. However, if the contestant did not incur any expenses for the website or web content, there is no expense or contribution to report.

Parliamentarian's website or social media accounts

See the Use of parliamentary resources section below.

Examples
  1. A group page has been created for the contestant on a free social networking site. Volunteers manage the page and post articles related to the nomination contestant. As long as the volunteers are helping outside their regular working hours and are not self-employed in the business of managing social media, the volunteer labour is not an expense.
  2. The financial agent hires a media firm to post content on the contestant's website, promoting the campaign. All expenses related to designing, developing and posting the content are nomination contest expenses.
  3. The contestant has a personal Twitter account and continues to tweet from that account during the contest period. Sometimes she tweets about her campaign. If the contestant is tweeting for free, there is no expense to report.
OGI reference

For a detailed discussion of a similar topic, please refer to Elections Canada's interpretation note 2018-04, Pre-existing Web Content of Registered Parties in an Election, on the Elections Canada website.

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:

  • promoting or opposing a nomination contestant or any position on an issue with which a contestant is associated
  • encouraging electors to vote or to refrain from voting
  • providing information about the election, including information about voting hours and the location of polling stations
  • gathering information about how electors voted in past elections, or will vote in the election, or their view on a nomination contestant or on any issue with which a contestant is associated
  • raising funds for a nomination contestant

Expenses incurred for voter calls conducted during the election period, including the cost of production and distribution, are nomination contest expenses.

Note: The nomination contestant's campaign 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 during an election period. Refer to the CRTC's Voter Contact Registry web page for details.

Mass text messaging

When a nomination contestant's campaign sends mass text messages during the contest period to promote or oppose a contestant, the expenses incurred for production and distribution are nomination contest expenses.

While they may result in nomination contest expenses, text messages sent by a contestant's campaign are generally not regulated by the CRTC under Canada's Anti-Spam Legislation. The messages are covered only if they are commercial in nature, excluding a text whose primary purpose is to solicit a contribution. This means that text messages promoting or opposing a contestant, asking for an elector's vote or asking for a contribution are not subject to CRTC rules.

There is also no requirement to identify the sender under the Canada Elections Act, though it is recommended as a best practice.

Note: For more information on text messaging, please refer to the CRTC’s web page entitled "Frequently Asked Questions About Canada's Anti-Spam Legislation."

Surveys

Expenses related to surveys or research conducted during the contest period are nomination contest expenses. Expenses related to surveys or research conducted outside the contest period are not nomination contest expenses, even if the results of the survey are used during the contest.

Example

During the contest period, the financial agent engaged Election Polling Inc. for $1,500 to conduct a survey. Once the survey was completed, the financial agent issued a cheque from the campaign bank account to pay Election Polling Inc., recorded the amount as a nomination contest expense and kept the invoice to submit later with the contestant's return.

Capital assets

Under the Canada Elections Act, a capital asset is any property with a commercial value of more than $200 that is normally used outside a nomination contest other than for the purposes of a contest. (for example, computers, software, printing equipment and furniture).

If the contestant's campaign purchases a capital asset and uses it during the contest period, the nomination contest expense is the lower of the commercial value of renting a similar asset for the same period or the purchase price.

For non-capital assets such as office supplies, the purchase price must be recorded as a nomination contest expense.

Capital assets might be received in the form of a contribution from an individual. In that case, the commercial value of the asset is a non-monetary contribution. If the asset was used during the contest period, the nomination contest expense is the lower of the commercial value of renting a similar asset for the same period or the purchase price. The remaining amount, if any, is an other nomination campaign expense.

Note: Amortization may not be used as a method of calculating the commercial value of the use of the asset.

Note: Capital assets acquired during the campaign must be disposed of at the end of the campaign. They must be sold at fair market value and the funds transferred to the candidate endorsed by the party in the electoral district in which the contest was held, to the registered association that held the contest or to the registered party. The assets themselves cannot be transferred.

Examples
  1. The contestant's campaign rents two computers from a local office supplier for $500 during the contest period. The rental agreement is for two months (61 days) and extends 15 days past the end of the contest period. The cost of renting the computers during the contest period is a nomination contest expense, and it is calculated as follows: $500 / 61 x (61 – 15) = $377.05. The remaining amount, $122.95, is recorded as an other nomination campaign expense.
  2. The financial agent pays $100 at a garage sale for the purchase of a printer for the campaign. The commercial value of renting a similar printer during the contest period would have been $150. The financial agent records $100 as a nomination contest expense since the purchase price, $100, is lower than the rental rate.
  3. A volunteer uses his personal laptop to do work for the campaign during the contest period. The commercial value of renting a similar laptop for the 40-day contest period would be $80. This is a non-monetary contribution from the volunteer. However, because the amount is $200 or less and the volunteer is not in the business of providing electronics, the non-monetary contribution is deemed to be nil and there is no expense to report.

Rental of a campaign office

The campaign may rent an office for the nomination contestant's campaign. Only the portion of the rent used during the contest period is a nomination contest expense. The portion of the rent used before and after the contest period is an other nomination campaign expense.

Example

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.

Installation and other office expenses

The expense incurred to install items used during the contest period is a nomination contest expense even if the installation takes place before the contest is called, as long as the item itself is a nomination contest expense. Installation expenses cannot be prorated.

Other office expenses include the cost of buying office supplies, such as paper or toner cartridges, or supplying refreshments during meetings.

Example

The campaign pays $500 in labour for a worker to install telephones, computers and printers in the office before the contest starts. The full $500 is a nomination contest expense because the installed equipment is used during the contest period.

The campaign also pays a monthly rate of $200 for telephone usage. The prorated cost for days during the contest period is a nomination contest expense, while the prorated cost for days outside the contest period is an other nomination campaign expense.

Cell phones

A nomination contestant’s campaign might provide the contestant and workers with cell phones for use during the contest period. If the campaign supplies the phones, the nomination contest expense is the cost of the cell phones and monthly usage plans, prorated for the length of the contest period, plus any additional fees.

If personal cell phones are used, there are two ways that the expenses may be accounted for:

  • Contestants or workers may ask the campaign to reimburse expenses that they incurred because of the contest. These costs are nomination contest expenses for days during the contest period.
  • Contestants or workers may make a non-monetary contribution of the use of their phone. If the commercial value of its use is $200 or less per transaction (for example, per monthly phone bill) and the person is not in the business of providing cell phone service, then the contribution amount is deemed to be nil and no expense is reported.
Examples
  1. The nomination contestant’s campaign rents cell phones for its workers at a cost of $30 per day over a 40 day contest period. The rental company charges a usage fee per transaction. The nomination contest expense is $1,200 (40 x $30) plus any transaction fees incurred on days during the contest period. Any costs for days outside the contest period are other nomination campaign expenses.
  2. Ling, a contestant, uses her own cell phone for campaigning during a 40-day contest period. This use must be accounted for. Ling’s monthly plan is $120. Because the plan is $200 or less, Ling could make a non-monetary contribution of the commercial value of the plan, and it would be deemed nil. However, the campaign has agreed to reimburse the expense. The nomination contest expense is the full cost of Ling’s plan prorated over 40 days (($120 / 31) x 40 = $160)).

Campaign workers and related expenses

The nomination contestant’s campaign may have to report various nomination contest expenses related to their paid workers and volunteers: incidental expenses, travel and living expenses, and compensation.

Incidental expenses of campaign workers

Whether campaign workers are volunteering or being paid, some incidental expenses related to their work, such as for local transportation and refreshments, are nomination contest expenses.

If a worker pays for incidentals and is not reimbursed, the amount is a non-monetary contribution and an expense. However, if the amount is $200 or less and the individual is not in the business of providing that property ore service, the non-monetary contribution is deemed to be nil and no expense has to be reported. Each incidental expense is measured individually against the $200 threshold to determine whether the contribution is deemed nil.

Examples
  1. Late one night during the contest period, volunteers help in the campaign office to prepare hundreds of flyers for mailing. A volunteer orders pizza and pays the pizza delivery person $85 with their personal credit card. The campaign reimburses the volunteer a few weeks later. The amount of $85 is a nomination contest expense.
  2. A volunteer is driving around in her own car to deliver flyers during the contest period. She pays $30 to fill up her car. If the amount is not reimbursed by the campaign, the volunteer made a non-monetary contribution. However, because the amount is less than $200, the non-monetary contribution is deemed to be nil and no expense has to be reported.

Travel and living expenses of campaign workers

Campaign workers, whether volunteering or being paid, might travel to help at campaign events during the contest period.

No matter when the travel happens, if the work performed at the destination is a nomination contest expense, the travel expense in both directions is a nomination contest expense. This includes return trips after the selection date.

Temporary lodging and meals (or per diems) are also a nomination contest expense but only for days during the contest period.

It is advisable to have a written agreement or other documentation about a campaign worker’s travel and living expenses to support all amounts being reported. In the absence of evidence, the payments may be considered an inappropriate use of campaign funds that would need to be returned.

When a worker is sharing transportation with the nomination contestant, some of the cost may be a nomination contest expense and some may be the contestant’s travel and living expense. See Chapter 10, Nomination Contestant's Travel and Living Expenses.

Travel and living expense of campaign workers Timing Reported as
Travel to and from destination Days during or outside contest period Nomination contest expense
Lodging and meals

Days during contest period

Days outside contest period

Nomination contest expense

Other nomination campaign expense

Note: If a worker pays for travel and living related to the campaign and is not reimbursed, the amount is a non-monetary contribution and a reportable expense. However, if the amount is $200 or less and the individual is not in the business of providing that property or service, the non-monetary contribution is deemed to be nil and no expense is reported.

Note: If workers have travelled to a particular destination for a purpose unrelated to the contest and help with the campaign while there, only incremental expenses incurred to help are nomination contest expenses.

Examples
  1. The campaign rents a bus to transport volunteers to one of the nomination contestant’s speaking events during the contest period. It spends $600 on the rental and another $100 on refreshments for the volunteers. The $700 is a nomination contest expense.
  2. A campaign worker in a remote part of the riding travels to campaign headquarters on contest day to help with get-out-the-vote activities. The contestant’s campaign paid for the train ticket there, and the worker has offered to pay for the return trip after contest day. The expense in each direction is $250. The campaign records a nomination contest expense of $500, even though the return trip is after the contest period, and a non-monetary contribution of $250 from the worker.

Compensation of workers

The campaign may choose to pay compensation to the financial agent or other campaign workers, including paying volunteers for part of their work.

If a campaign worker is not receiving regular pay (i.e. a salary or hourly wage), please see information on paying volunteers for part of their work under Volunteer labour is not a contribution in Chapter 2, Contributions.

For work performed during the contest period, compensation is almost always a nomination contest expense. Before the contest period, it is occasionally a nomination contest expense. It is never a nomination contest expense after the contest period. The table below provides examples.

An agreement must be in place before the work is performed. Once an agreement is in place, the campaign is liable for the related expenses.

An invoice is required for payments of $50 and over, setting out the nature of the expense. Because compensation expenses can vary widely, it is advisable to have a written agreement or other documentation about a campaign worker’s compensation to support all amounts being reported. Failure to adequately support the expenses may result in follow-up enquiries by Elections Canada auditors. In the absence of evidence, the payments may be considered an inappropriate use of campaign funds that would need to be returned.

Timing Compensated work: examples Reported as Why
Before contest period Planning, budgeting, creating contact lists Other nomination campaign expense Research-style activities are nomination contest expenses only during the contest period
Canvassing homes, distributing flyers one week before the contest period Other nomination campaign expense The communication has been fully transmitted before the contest period
Installing signs, designing flyers for use during the contest period Nomination contest expense The communication will be used during the contest period to promote/oppose a contestant
During contest period General campaign work Nomination contest expense Most work during the contest period is done to promote/ oppose a contestant
Processing contributions Other nomination campaign expense Certain fundraising work is excepted from nomination contest expenses (see Chapter 6)
After contest period Any work Other nomination campaign expense Work done after the contest period does not promote/ oppose a contestant during a contest period
Example

Leslie, a nomination contestant, is paying her financial agent $500 for work done before the contest period, including budgeting, signing contracts and preparing lists of volunteers. The $500 is an other nomination campaign expense. A portion of the $500 could be a nomination contest expense if the output of the work, such as a campaign website, voter contact script or launch party, is tied to a specific activity during the contest period. Leslie is paying her financial agent another $1,000 for general work during the contest period. The $1,000 is a nomination contest expense.

High-profile campaigners and invited guests

Parliamentarians, candidates or celebrities will sometimes campaign with a nomination contestant at in-person events. The contestant might also invite a high-profile guest to play an official role in an event.

When it comes to expenses, high-profile campaigners and guests are treated in the same way as campaign workers. This means their travel and living expenses associated with the event are nomination contest expenses. Any compensation paid to them (or the commercial value of a service that they are not eligible to provide as a volunteer) is also a nomination contest expense.

If they have travelled to a particular destination for purposes unrelated to the contest and help with the campaign while there, only incremental expenses incurred to help are nomination contest expenses.

Some celebrities charge appearance fees to take part in events, though as individuals they often make the personal choice to participate for free in other events. As with any individual, if a celebrity is self-employed as a speaker but chooses to express their personal political views at a nomination contestant’s event without being paid, they may do so without making a non-monetary contribution.

However, there is a difference when the celebrity is asked to provide a service other than speaking or appearing, such as participating as an emcee or a performer. In that case, the commercial value of the service is a nomination contest expense, whether paid by the contestant or contributed by the celebrity.

Note that a celebrity’s participation in a contestant’s event is not captured as a third party partisan activity, since the contestant organizes the event and reports the expenses.

Examples
  1. The nomination contestant invites Faiza, a celebrity who sometimes charges for speaking engagements, to give a speech at a campaign rally. Faiza supports the contestant and can choose to speak for free. She does not have to charge for her participation or make a contribution of its commercial value. Faiza did not have to travel to attend the event, and the campaign incurred no additional expenses for her to participate. There is no contribution or nomination contest expense to report for her participation.
  2. Clydie G, a famous Canadian musician, is touring during the contest period and plays a show in Vancouver. The next day, he flies to Victoria to join a nomination contestant on stage at a rally and performs a song. He then flies back to continue his tour. The cost of the round-trip flight is $400. It is a nomination contest expense that must be paid by the contestant or contributed by Clydie G. For the performance itself, because Clydie G is self-employed as a musician, he cannot volunteer the service. The commercial value of the performance is a nomination contest expense that the contestant must pay or Clydie G must contribute.
  3. A senator plans to go door-knocking with a nomination contestant from her home province. The senator was already in the province, but she pays $200 in gas to drive to the contestant’s riding. This is a non-monetary contribution from the senator. Because it is $200 or less, it is deemed nil and no expense is reported.

Use of parliamentary resources

Nomination contestants who are parliamentarians might sometimes make use of parliamentary resources, such as websites and office staff, for their nomination campaigns.

The use of parliamentary resources during the contest period is a nomination contest expense. If the expense is not paid by the campaign, the use of the resource is a non-monetary contribution from the parliamentarian and is subject to the contribution limit.

Note:  The use of parliamentary resources is governed by other rules as well, including the Members By-law of the House of Commons (available on the Parliament of Canada website).

OGI reference

For a detailed discussion of a related topic, please refer to Elections Canada's interpretation note 2020-04, The Use of Member of Parliament Resources Outside of an Election Period, on the Elections Canada website.

Staff of a parliamentarian

If employees on the staff of a parliamentarian engage in political activities to support the parliamentarian as a nomination contestant during the contest period, the salaries of these persons are nomination contest expenses and, if not paid by the campaign, are non-monetary contributions from the parliamentarian.

However, if the employees work on the contestant’s campaign outside their normal business hours or are on unpaid leave (or paid, if the leave was earned under regular terms of employment that do not specify leave for the purpose of helping a political campaign), their involvement is volunteer labour and is therefore neither a nomination contest expense nor a non-monetary contribution.

Website and social media accounts of a parliamentarian

Nomination contestants may have websites and social media accounts that are designed and maintained using parliamentary resources.

If the nomination contestant uses the website for the purpose of their campaign, its commercial value—including design, maintenance and hosting—is a nomination contest expense. Elections Canada will accept the current commercial value of an equivalent website as the commercial value of a pre-existing website.

Expenses to produce and distribute content on the website or social media accounts for the purpose of the campaign are also nomination contest expenses. Pre-existing content is only an expense if it was posted for the purpose of the campaign or promoted during the campaign.