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Political Financing Handbook for Third Parties, Financial Agents and Auditors – June 2021

To be used for non-fixed-date general elections and by-elections

8. Identifying and Allocating Regulated Expenses

This chapter helps a third party identify which expenses count as part of the expense for a regulated activity. It also explains how to allocate expenses in different scenarios.

It covers the following topics:

  • Identifying expenses for regulated activities
  • Allocating expenses in four scenarios: use of own resources, use of existing web presence, use for activities that begin before an election and use for activities during by-elections

Identifying expenses for regulated activities

Third parties incur a variety of expenses for regulated activities that they conduct during an election period. Some of them are costs specific to the activity (paying workers, buying advertising space or signs), while others are more general (overhead costs, expenses of volunteers).

All expenses incurred for a regulated activity are subject to a limit, so it is important to properly identify and report them. The examples below show the range of expenses that are captured.

Regulated activity Regulated expenses
Lawn sign advertising: an employee designs the lawn signs, they are printed at a stationery store, and a company installs them
  • Labour cost for the hours the employee spent on design
  • Reasonable allocation of the general overhead of the third party's office expenses, if any (e.g. based on labour hours)
  • Cost to print the signs at the store
  • Cost of sign installation (including labour and stakes)
Direct mail advertising: volunteers design, print and fold flyers at the third party's permanent office (also used for non-campaign purposes), and the flyers are mailed to voters
  • Cost of materials used to print the flyers
  • Reasonable allocation of the general overhead of the third party's office expenses (e.g. based on square footage used)
  • Cost of refreshments provided to volunteers
  • Cost of postage for mailing the flyers
Organic social media: volunteers create their own content and publish it on the third party's social media accounts
  • Expenses incurred by volunteers to create content, such as equipment rental (excludes use of personal computer or cell phone)
Barbecue to promote candidate: an employee organizes the event, a company provides food and drinks for free and temporary workers are hired to run the barbecue
  • Labour cost for the hours the employee spent organizing
  • Reasonable allocation of the general overheard of the third party's office expenses (e.g. based on employee labour hours)
  • Commercial value of donated food and drinks
  • Remuneration paid to temporary workers
Election survey: volunteers call electors from the campaign office to ask who they will vote for, and an employee analyzes the results to target partisan activities
  • Labour cost for the hours the employee spent developing the survey script and analyzing results
  • Cost of specialized software used to map the results
  • Costs of the temporary campaign office, such as rent and utilities (accounted for once for all activities)

Allocating expenses for regulated activities

Allocating overhead expenses when a third party uses its own resources

If the third party uses its office, equipment and paid staff to organize and carry out regulated activities, the third party must allocate the office expenses in accordance with the activities carried out. Office expenses include rent or property tax, utility cost, insurance, maintenance services, etc.

The third party should make a reasonable allocation for each component of costs: salary, equipment, supplies, materials, printing equipment and computers. Elections Canada accepts any reasonable basis for allocation of overhead—for example, an allocation based on labour hours or square footage used.

If the third party is an individual using their own resources—for example, a home computer or personal cell phone—no expenses need to be allocated.

Allocating expenses for websites and web content

Third parties commonly use websites to promote or oppose a political entity. This means that some portion of the costs to design, host and maintain the websites are partisan activity expenses in the election period. Social media accounts might also be used.


When a website is designed for the campaign, the regulated expense for the election period is calculated by:

  • using the actual expense incurred to produce the website
  • adding the prorated cost to host and maintain the website

When a pre-existing website is used for the campaign, the regulated expense for the election period is calculated by:

  • identifying the pages that contain content used for the campaign and determining the commercial value of designing equivalent pages (or the actual expense incurred to produce those pages, whichever is lower)
  • adding the prorated cost to host and maintain those pages
Web content

Expenses to produce and distribute web content are always regulated expenses when the content is first posted during an election period to promote or oppose a political entity. Web content includes text, audio, visuals, videos and promotional applications.

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

Expenses to produce and distribute pre-existing web content that remains accessible during the election period, whether on the third party's website or social media pages, is a regulated expense if the third party:

  • incurred the expense to produce the content for the campaign, or
  • promoted the content during the election period

Promotion, in the context of pre-existing web content, is to transmit or draw attention to an item of content through any means, such as advertising, mass emails, social media postings, re-posting of content, or coordinated promotion through another entity, person or group.

Allocating expenses outside and during an election period

When an activity takes place partly during an election period, the third party may need to allocate all or a portion of the related expenses toward the spending limit. There are a few points to consider:

  • even if they were incurred before the election, most expenses related to the activity are subject to the limit (for example, the production cost of a pre-existing campaign ad)
  • if the activity started before the election, a portion of the distribution expense might not be subject to the limit (for example, the daily placement cost of a newspaper ad)
  • no portion of planning and production expenses is allocated—the full expense is subject to the limit when the activity takes place at least partly during the election period

The table below gives examples of allocating expenses for activities outside and during elections.

When the activity takes place Examples Regulated expenses
Before the election period Survey of residents in the riding before the election about their voting intentions
  • No regulated expense for the survey, even if the results are used during the election
Starts before and continues during the election period Advertisement starting before the election and continuing until the last day of the election
  • All expenses for the advertisement, including design and production costs
  • Distribution cost calculated for the election period
Telephone calls to electors one week before the election, and one week into the election
  • All expenses for the scripts, including design and production
  • Cost of making the calls for a week during the election period
Election survey designed before the election and conducted during the election
  • All expenses for designing and conducting the survey, if the results are used for a regulated activity
Only during the election period A rally during the election using signs created before the election period
  • All expenses for the rally, including planning and organizing the event, labour costs, security, etc.
  • All expenses for designing and producing the signs

Note: As the timing of a non-fixed-date general election or by-election is not known in advance, a third party might be unable to cancel an activity on the day the election is called. The third party is deemed not to have incurred regulated expenses for an uncancellable activity.

  1. The third party starts running an advertisement in a newspaper on June 1, opposing the leader of a registered party. An election is called on June 4, and the third party chooses to continue running the ad until June 14. The cost to produce the ad is $4,000, while the cost to distribute the ad for 14 days is $7,000, or $500 a day. The election advertising expense is $9,500 ($4,000 + ($500 x 11 days)) and is subject to the limit. The distribution cost of $1,500 for the three days before the election period is not subject to the limit.
  2. The third party intends to conduct a survey during an election period. It has an employee design the survey before the election at a cost of $1,000, then conducts the survey during the election at a cost of $4,000 and uses the results for a partisan activity. The full cost of $5,000 to design and conduct the survey is an election survey expense.

Allocating expenses during by-elections

A third party that exists outside elections may, as part of its everyday operations, conduct activities that sometimes overlap with a by-election period. Expenses incurred by the third party to conduct election advertising, a partisan activity or an election survey during a by-election period are regulated expenses only if the activity was conducted for the by-election.

The totality of circumstances should be considered, including whether the activity mentions the by-election or an issue of particular interest in the electoral district, how many days into the election period it was transmitted, whether the communication was planned close to the 180-day limit for the by-election being called, and how the communication fits into the third party's overall strategy.

If a regulated activity takes place during and for a by-election, 100% of the planning and production cost is a regulated expense. This is true even if the regulated activity takes place in a broader area than the by-election riding.

If a regulated activity such as election advertising takes place in a broader area than the by-election riding, the regulated expense for distribution (if applicable) is what it would actually cost to distribute to the smallest area that includes the by-election riding. If there is no smaller distribution area for the specific medium used, then 100% of the distribution cost is a regulated expense.

If multiple by-elections are underway at the same time, and the same regulated activity takes place in more than one electoral district, a third party may allocate the expenses among the affected districts.

  1. There is a by-election underway in Scarborough–Agincourt. The third party runs an ad promoting a registered party on XYZ News across Ontario. The third party paid $4,000 to produce the ad and $2,000 to run the ad on XYZ Ontario. For this advertising, the smallest distribution area that includes Scarborough–Agincourt is XYZ Toronto. The actual cost to run the ad on XYZ Toronto would have been $1,600. The regulated expense subject to the limit is therefore $5,600 ($4,000 production + $1,600 distribution).
  2. Several by-elections are underway, and the ridings belong to different broadcast areas. The third party purchases election advertising that promotes a registered party and is transmitted a different number of times in these broadcast areas. The third party divides the production cost evenly among the ridings and reports the actual transmission cost for each riding.
  3. By-elections are underway in three ridings. The third party pays a corporation $3,000 to plan a rally in each riding, supporting a registered party. The third party also pays $3,000 for 1,000 signs and distributes them based on the expected number of attendees: it sends 200 signs to the first riding, 300 to the second riding and 500 to the third riding. The financial agent reports the expenses subject to the limit in each riding as follows:

    • he allocates the design and production cost for the 1,000 signs among the ridings, based on the number of signs they receive: $600 for the 200 signs in the first riding, $900 for the 300 signs in the second riding and $1,500 for the 500 signs in the third riding
    • he allocates the expenses incurred for planning and organizing the rallies evenly among the ridings: $1,000 for each of the three ridings
    • he reports the actual cost to send the signs to each riding
    • he reports the local cost for each rally (permits, security, expenses of volunteers, etc.)