Political Financing Handbook for Nomination Contestants and Financial Agents (EC 20182) – December 2023

9. 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:

• fall into another category (see an overview in Chapter 8, Nomination Campaign Expenses)
• are non-promotional fundraising expenses (see Chapter 7, Fundraising)

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 Entities 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.

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.

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 we recommend it 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."

Voter databases, surveys and research

Voter databases

An expense that a nomination contestant's campaign incurs for the use of voter database software during a contest period is a nomination contest expense. The table below shows how to determine the nomination contest expense, based on the software arrangement.

The campaign must also report an "other" nomination campaign expense if it incurs expenses to use voter database software outside the contest period.

If the registered party or a registered association offers a contestant access to its voter database software, either the access must be offered equally to all contestants or the contestant must be invoiced for the expense to avoid an irregular transfer.

Surveys and research

Whether an expense for a survey or research is a nomination contest expense depends on when it was conducted. The date that a campaign conducts a survey or research is the date that it receives the data. If the contestant's campaign conducts a survey or research:

• during the contest period, it is a nomination contest expense
• outside the contest period, it is not a nomination contest expense but an other nomination campaign expense, even if the data is used during the contest period

Expenses to add data to a database and clean the data during the contest period, and for system support during the contest period, are also nomination contest expenses.

Data from an external source

When a nomination contestant's campaign receives data for free or at a discount from an external source, it is accepting a contribution.

An external source is a person or group other than:

• the registered party and its registered associations, if the data is offered equally to all contestants
• a person providing volunteer labour to the nomination contestant (see Volunteer labour is not a contribution in Chapter 3, Contributions)

If an external source is an ineligible contributor or an individual who would exceed their contribution limit, the campaign must be invoiced for the data at commercial value. The commercial value is the lowest amount charged by a business for a dataset with a similar number of entries and data fields and with a similar level of quality and currency.

If the external source is not in the business of selling data and collected data specifically for the nomination contestant, the invoiced amount must be the actual expenses incurred.

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.

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.

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.

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 during the contest period, 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 incremental expenses that they incurred because of the contest are $200 or less (for example, additional fees 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.

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.

The campaign may provide gift cards to its workers specifically to cover incidental expenses, such as gas and food, during the contest period. These gift cards are reported as nomination contest expenses, not as gifts to workers. To support the expenses, workers who make a purchase of $50 or more with a gift card should get an invoice (or other document evidencing the expense) showing the date, amount and items purchased, while workers who make a purchase of less than $50 with a gift card should record the date, amount and nature of the expense.

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 11, Nomination Contestant's Travel and Living Expenses.

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.

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 3, 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.

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.

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 House of Commons' Members By-law should be consulted as it may place limitations on certain uses of parliamentary resources (available on the Parliament of 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 working 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 entity), 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.

Parliamentary database of a member of Parliament

A member of Parliament who is running as a nomination contestant might use information on electors from their parliamentary database to promote their nomination. The campaign has to report the commercial value of the data as a personal contribution from the member, subject to their contribution limit, unless it is paid by the campaign. It is also a nomination contest expense or an other nomination campaign expense, depending on when the data was shared with the campaign.

The commercial value is the lowest amount charged by a business for a dataset with a similar number of entries and data fields and with a similar level of quality and currency. Any compensation paid to staff from the parliamentary budget to do campaign database work must also be reported.

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