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A political entity may sometimes wish to move funds, property or services to another political entity of the same affiliation. These transactions are called monetary or non-monetary transfers. There is no limit on the amount or frequency of transfers, but there are restrictions on what can be transferred and when. Independent candidates cannot send or receive transfers at all.
This module explains transfers in general terms. Some rules are different for each entity, and we will discuss those in separate modules.
Monetary transfers are simply transfers of funds between political entities. The transferred amount is reported by both the sending and receiving entity.
For example, a registered party can send money at any time to any of its electoral district association. Both the party and the registered association have to report the amount in their annual financial return as a monetary transfer sent or received.
Non-monetary transfers require a bit more administration. If a political entity receives property or a service from an affiliated entity at no charge, the full commercial value of the property or service is a non-monetary transfer. The same amount is also an expense.
For example, let's say the registered association stored the lawn signs from the previous election and now sends them to the candidate for a new election campaign. The commercial value of the signs is $2,000, which is the current cost of the same quantity of new signs. The association reports $2,000 as a non-monetary transfer to the candidate. The candidate's official agent reports $2,000 as a non-monetary transfer from the association, and the same amount as an electoral campaign expense.
In other cases a political entity might buy property or a service from an affiliated entity for less than commercial value. What is the amount of the non-monetary transfer? It is the difference between the full commercial value of the property or service and the discounted price. Keep in mind that no matter the discount, the full commercial value of the transferred property or service is an expense.
Let's walk through another example. A registered association buys posters before an election. The cost, or commercial value, is $500. The association sends the posters to the candidate's campaign with an invoice for $100, and a copy of the supplier invoice for $500. The candidate's official agent pays $100 to the association and reports the following: a $400 non-monetary transfer from the association, a $100 amount paid, and a $500 electoral campaign expense. The association reports a $400 non-monetary transfer to the candidate. The $100 simply flows through the association's balance sheet.
So to summarize, for a transaction to be a non-monetary transfer, the property or services either have to be provided at no charge or at less than commercial value. If the political entity sends an invoice and receives payment for the same amount as the supplier invoice, the transaction is not a transfer but a sale of property or services.
Finally, it is important to know that the Canada Elections Act prohibits the transfer of expenses without accompanying property or services. Registered parties and candidates have separate spending limits for an election, and each entity has to report the property and services it used in its campaign.
To learn how to administer transfers for specific entities, please take a look at our other modules and resources.