Political Financing Handbook for Candidates and Official Agents (EC 20155) – February 2019 – draft guideline OGI 2019-02
This document is Elections Canada's draft guideline OGI 2019-02.
Click on the link for the latest Political Financing Handbook for Candidates and Official Agents.
This chapter defines what is and is not a contribution, explains the rules for administering contributions and provides practical examples. It covers the following topics:
- What is a contribution?
- What is commercial value?
- Who can contribute to whom and how much?
- Are paid leave, volunteer labour, sponsorship or advertising contributions?
- What are the rules for contribution receipts, anonymous contributions and ineligible contributions?
What is a contribution?
A contribution is donated money (monetary contribution) or donated property or services (non-monetary contribution).
|Monetary contribution||Non-monetary contribution|
|A monetary contribution is an amount of money provided that is not repayable.
Monetary contributions include cash, cheques, money orders, credit card or debit card payments, and online payments (other than contributions of cryptocurrency).
|The amount of a non-monetary contribution is the commercial value of a service (other than volunteer labour) or of property, or the use of property or money, to the extent that it is provided without charge or at less than commercial value. This includes contributions of cryptocurrency and forgone interest on loans.|
What is commercial value?
Non-monetary contributions are recorded at commercial value. Commercial value, in relation to property or a service, is the lowest amount charged at the time that it was provided for the same kind and quantity of property or service, or for the same use of property or money, by:
- the person who provided the property or service (if the person who provided it is in that business), or
- another person who provides that property or service on a commercial basis in the area (if the person who provided the property or service is not in that business)
Note: If the commercial value of a non-monetary contribution is $200 or less, and it is from an individual not in that business, the contribution amount is deemed to be nil.
- David, who is not in the business of renting office supplies, lends a photocopier to the campaign office for the duration of the campaign. The official agent has to determine the commercial value of this non-monetary contribution by checking with local suppliers to see how much they would charge for renting similar equipment for the same period. If that amount is greater than $200, a non-monetary contribution must be reported. If it is $200 or less, the contribution is deemed nil and does not have to be reported.
- Paula, a self-employed individual in the business of providing information technology services, offers to set up the computers in the campaign office and does not charge for the service. This is a non-monetary contribution from Paula. The commercial value is equal to the lowest amount she normally charges for the same kind of service of similar scope.
Who can contribute?
Only individuals who are Canadian citizens or permanent residents of Canada can make a contribution to a registered party, a registered association, a candidate, a leadership contestant or a nomination contestant.
Contributions can be accepted from minors, but political entities should consider whether the person is contributing willingly and using their own property or money.
Any money that is used for the campaign out of the candidate's own funds is a contribution. The only exception is if the money is being used to pay personal expenses (see Chapter 9) or litigation expenses (see Chapter 11) and it is not deposited into the campaign bank account.
If the candidate obtains a loan from a financial institution for the purpose of making a contribution to their own campaign, the loan must be guaranteed by the personal property of the candidate.
Note: Corporations, trade unions, associations and groups cannot make contributions.
Limits on contributions, loans and loan guarantees to a candidate
This table displays the limits for candidates. The limits for all entities are available in Chapter 1, Reference Tables and Timelines.
|Political entity||2019 annual limit||Limit per election called between Jan. 1 and Dec. 31, 2019|
|In total to all the registered associations, nomination contestants and candidates of each registered party||$1,600*||n/a|
|To each independent candidate||n/a||$1,600*|
- The contribution limits apply to total contributions, the unpaid balance of loans made during the contribution period, and the amount of any loan guarantees made during the contribution period that an individual is still liable for.
- The sum of these three amounts cannot at any time exceed the contribution limit.
There is an exception to the limits on contributions:
- A candidate is permitted to give a total of $5,000 in contributions, loans and loan guarantees to their campaign. A candidate is also permitted to give an additional $1,600* in total per year in contributions, loans and loan guarantees to other candidates, registered associations and nomination contestants of each party. (This includes contributions to the registered association in the candidate's electoral district and contributions to the candidate's own nomination campaign.)
*The limits increase by $25 on January 1 in each subsequent year.
- Max decides to contribute $1,600 to the registered party he supports. In addition, he makes a $600 contribution to the party's registered association in his riding. When a federal election is called in the same year, he makes a $1,000 contribution to the candidate representing the party in his riding. With that, Max reaches the annual limit for contributions to the registered party as well as the annual limit for contributions to any combination of candidates, registered associations and nomination contestants of the registered party. He could still make a contribution to political entities of other registered parties.
- Clara made a $1,600 contribution in her riding to the registered association of the party she supports. Later that year an election is called and Clara makes a $1,600 contribution to the candidate representing the party in her riding. The official agent of the candidate, however, is aware of the contribution made to the association and returns the cheque to Clara because, with the earlier contribution, she has reached her annual limit.
Note: It is important that financial agents of electoral district associations and nomination contestants, and official agents of candidates, communicate about contributions, loans and loan guarantees because the yearly contribution limit applies to the total amount of these.
- Peter gave a $1,600 loan to a candidate in his riding early in the year. The full amount is still outstanding on December 31. Consequently, Peter could not have made another loan, contribution or loan guarantee that year to a candidate, registered association or nomination contestant of the same party. The sum of contributions, loans and loan guarantees cannot at any time exceed the contribution limit.
- Trudy is running as a candidate in an election and wants to contribute the maximum amount to support herself. She contributed $2,575 to her nomination campaign in the previous year. In the current year, she contributes $5,000 to her electoral campaign and $1,600 to the registered association in her riding. She also contributes $1,600 to the registered party. With this, Trudy reaches the contribution limit for her electoral campaign and the annual limit on contributions to the registered party and any combination of candidates, registered associations and nomination contestants of the registered party.
Note: These examples use the limits in effect for 2019.
Paid leave for a candidate is not a contribution
An employer can give an employee a paid leave of absence during an election period to allow the person to be a nomination contestant or a candidate. The paid leave is not a contribution.
A paid leave of absence for anyone other than a nomination contestant or a candidate is a contribution.
Volunteer labour is not a contribution
What is volunteer labour?
Volunteer labour is any service provided free of charge by a person outside of their working hours, excluding a service provided by a self-employed person who normally charges for that service.
Volunteer labour is not a contribution.
Who is eligible to volunteer?
Any person can volunteer for a political entity, even if they are not a Canadian citizen or permanent resident.
But a self-employed person cannot volunteer a service they would normally charge for. That is a non-monetary contribution and not volunteer labour. The person would have to be an eligible contributor under the contribution rules.
People who work on-call or variable hours can volunteer for a political entity, as long as they are not self-employed in the field and their employer has not instructed them to work for the political entity while receiving standby pay or other compensation.
Volunteer labour cannot be provided by corporations, trade unions, associations or groups.
Note: To know whether a person is an employee or self-employed, ask if they receive a salary or wages, payroll deductions and a T4 slip from their employer or corporation at tax time. If they do, the person is an employee for the purpose of the Canada Elections Act and can volunteer in the same capacity as their line of business, outside their working hours.
- Nana, who is employed as a teacher, offers to work for the candidate's campaign in the evenings, making phone calls to party members. This is volunteer labour and therefore is not a contribution.
- Alex, a self-employed graphic designer, offers to design a flyer for the candidate free of charge. Because Alex is self-employed and normally charges for that service, the flyer design is not volunteer labour. The commercial value of the service has to be recorded as a nonmonetary contribution. In this case, the commercial value is the lowest amount Alex normally charges for that service.
- Beatrice is employed by a corporation and is paid to be on standby every weekend. During these hours, while waiting to be called by her employer, she works on the candidate's communications strategy for free. This is volunteer labour. However, if the corporation had instructed Beatrice to help the campaign while being paid, the services provided would be an ineligible contribution from the corporation.
Paying volunteers for part of their work
Volunteers can be paid for part of their work, but the paid work is not volunteer labour. An agreement must be in place before the work is performed. It can specify incentive- or performance-based terms of remuneration rather than a fixed rate.
Once an agreement is in place, the campaign is liable for the related expenses. The compensation is recorded as an election expense if the work was done or the output of the work was used during the election period. If the output was not used during the election period, the expense is an other electoral campaign expense.
If the campaign gives monetary compensation to volunteers without a prior agreement being in place, it may be considered an inappropriate use of campaign funds that would need to be returned.
- Sam works full-time as an administrative officer on the staff of a member of Parliament. When the member runs as a candidate in the next election, Sam takes an unpaid leave of absence to volunteer for the campaign. The candidate offers Sam an honorarium for the hours he will work—a fixed amount of $1,000 for the election period. The official agent puts this agreement in writing at the start of the campaign, and the honorarium is an election expense that has to be reported.
- Suzanne is being paid to manage a candidate's social media accounts during the election period. Suzanne has signed an agreement that lists the tasks she will perform and her hourly wage. Often, when she has finished her paid work, Suzanne volunteers for the campaign. This is an acceptable combination of paid and volunteer work. The expenses incurred under the agreement are election expenses that have to be reported. The volunteer labour is not reported.
Nominal gifts and thank-you parties
The candidate's campaign can give each volunteer nominal gifts (but not money) up to a total value of $200 and throw a thank-you party without this being considered compensation. The associated expenses are other electoral campaign expenses and are not subject to the election expenses limit.
If the campaign gives gifts to volunteers above the nominal gift threshold, it may be considered an inappropriate use of campaign funds that would need to be returned.
After the election, the campaign holds a pizza party for its volunteers. They are each given a $50 travel bag and a $100 gift card in appreciation of their hard work. The cost of the gifts and thank-you party is an other electoral campaign expense not subject to the election expenses limit.
For a detailed discussion of this topic, please refer to Elections Canada's interpretation note 2017-04, Volunteer Labour, on the Elections Canada website.
Sponsorship or advertising at a political event is a contribution
A transaction involving the receipt of money by a political entity in exchange for advertising or promotional opportunities directed at members or supporters of the political entity is not recognized as a commercial transaction. Any money received as part of such an arrangement is to be treated as a contribution that is subject to the contribution limit and eligibility rules.
The candidate's campaign holds a golf tournament as a fundraiser. The campaign encourages individuals to sponsor a hole: for $200, they can have their names printed on a small sign attached to the flag pole. The full amount paid by each individual is a contribution to the candidate. The campaign does not ask corporations or unions to sponsor a hole because only individuals can make contributions.
Accepting and recording contributions
Only the official agent can accept contributions to the candidate's campaign.
|Contribution||What to do|
|Anonymous contributions||Anonymous contributions of $20 or less can be accepted.|
|Contributions over $20 and up to $200||The contributor's full first and last names have to be recorded (initials are not acceptable), and a contribution receipt must be issued. To issue a tax receipt, the official agent has to record the contributor's home address as well.|
|Contributions over $200||The contributor's full first and last names (initials are not acceptable) and home address have to be recorded, and a contribution receipt must be issued.|
This table summarizes some important points about accepting contributions and issuing receipts.
|Contribution received||What to keep in mind|
|Cheque from a joint bank account||
|Before candidate's nomination is confirmed||
|Through an online payment service||
|From a partnership||
|From an unincorporated sole proprietor||
Note: It is recommended that campaigns only accept contributions made by way of a traceable instrument.
Accepting contributions of cryptocurrency
A contribution of cryptocurrency is non-monetary and not eligible for a tax receipt.
The contribution amount is the commercial value of the cryptocurrency at the time that it was received. There are two ways to determine the commercial value:
- If the transfer passed through a payment processor (such as BitPay) that provided an exchange rate, use that rate.
- If the transfer did not go through a payment processor or no exchange rate was provided, use a reasonable rate on a major exchange platform (such as Coinbase) at the time closest to when the transfer was sent. The valuation must be readily ascertainable and verifiable.
A transaction in cryptocurrency will almost always involve a processing fee. The full amount sent by the individual is a contribution to the political entity, and the processing fee is an expense.
Political entities should set up a two-step process to identify contributors of over $20 and record transaction information from the blockchain so that contributions can be audited.
For contributions up to $200, if the contributor is not in the business of selling cryptocurrencies, the contribution amount is deemed nil. But the contributor must still be eligible under the contribution rules. Over $20, the campaign must keep a record of the contributor's name.
In all instances, campaigns should be mindful of the rules in the CEA against circumventing contribution rules and watch for unusual amounts or patterns in contributions that they receive.
For a detailed discussion of this topic, please refer to Elections Canada's interpretation note 2018-10, Cryptocurrencies, on the Elections Canada website.
Issuing contribution receipts
A receipt has to be issued for each monetary contribution over $20 or non-monetary contribution over $20 that is not deemed nil. Only the official agent can provide official receipts for contributions, including tax receipts.
Tax receipts can be issued only for monetary contributions received within a specified period. The period starts on the day the candidate's nomination is confirmed by the returning officer. It ends on the day that is one month after election day. Under Canada Revenue Agency rules, contributions received after election day must have been in transit on election day to be eligible for a tax receipt (see their information circular IC75-2R9).
Tax receipts have to be issued on prescribed forms, either paper or electronic.
Paper tax receipts are available from Elections Canada. It is important to keep in mind that if the official agent requests paper tax receipts, these must all be returned (copies of used pages, plus unused and cancelled receipts) to Elections Canada no later than one month after election day.
Alternatively, the official agent may use Elections Canada's Electronic Financial Return (EFR) software to issue all receipts. It is easy to use and makes paper tax receipts from Elections Canada unnecessary. Please refer to the EFR User Guide for more information. The guide can be found under the Help menu within the EFR software. EFR is free and can be accessed from the Elections Canada website.
Clara contributed $300 to Peter, who announced that he would be running as a candidate in the next election. Once Peter's nomination was confirmed, Clara made another contribution of $500. Clara will receive a tax receipt for $500, although the total amount she contributed was $800. She must receive an official receipt (not valid for tax purposes) for the other $300.
Determining the date a contribution is made
As most contribution limits apply per calendar year, the date a contribution is made is important. It is also important for reporting purposes because this same date will be used as the "date received" in the candidate's return.
The date a contribution is made is generally the date the contribution is in the hands of the official agent. There are exceptions for contributions made by regular mail, by post-dated cheque and electronically.
|How contribution is made||Date contribution is made|
|In person||The date the contribution is in the hands of the candidate's official agent.|
|By regular mail||The date of the postmark on the envelope. If the postmark is not legible, the contribution is made on the date the agent receives the mail. The campaign should keep the stamped envelope as part of its records.|
|Post-dated cheque by any means||The date on the cheque.|
|Electronically (e-transfer, credit card, PayPal, etc.)||The date the contributor initiates the transaction. If the transaction is post-dated, the contribution is made on the date specified by the contributor.|
- On December 23, 2018, Lucy goes to the campaign office and gives a cheque in the amount of $300, dated for the previous day. The official agent deposits the cheque on January 10, 2019. The contribution is made on December 23, 2018. The official agent issues a receipt for 2018, and the amount counts toward Lucy's 2018 contribution limit.
- Hassim makes an e-transfer to the candidate's campaign on December 23, 2018, but the official agent does not process the amount until January 10, 2019. The contribution is made on December 23, 2018. The official agent issues a receipt for 2018, and the amount counts toward Hassim's 2018 contribution limit.
- The official agent receives a cheque from Janelle in the mail on January 5, 2019. The cheque is dated December 28, 2018, and the postmark on the envelope is December 30, 2018. The contribution is made on December 30, 2018. The official agent issues a receipt for 2018, and the amount counts toward Janelle's 2018 contribution limit.
- The official agent receives a cheque from Andrew during the election period and deposits it in the campaign bank account. A few days later, when checking the account online, the official agent notices that the bank has charged the account a fee because the cheque did not have sufficient funds. No contribution has been made and the bank charge is an other electoral campaign expense. If Andrew issues a new cheque later, the contribution is made on the date associated with the new contribution.
Recording anonymous contributions
If anonymous contributions of $20 or less are collected during an event related to the campaign, the official agent has to record:
- a description of the function at which the contributions were collected
- the date of the function
- the approximate number of people at the function
- the total amount of anonymous contributions accepted
Anonymous contributions of $20 or less may also be received outside the context of a particular function. In that case, the official agent has to keep track of the total amount collected plus the number of contributors.
Campaign volunteers organize a wine and cheese event one evening in the campaign office, and invite local residents. Approximately 40 people show up. During the evening, the campaign manager passes a basket around to collect cash contributions from the attendees. She informs the guests about the contribution rules: a maximum of $20 can be accepted from any one individual as an anonymous cash contribution. At the end of the evening there is $326 in the basket.
After the event the official agent has to record the following: a description and the date of the event, the approximate number of people who attended (40), and the amount collected in anonymous contributions ($326). The official agent has to deposit the amount into the campaign bank account.
Remitting anonymous contributions that cannot be accepted
If the campaign receives a contribution that is:
- over $20 and the name of the contributor is not known, or
- over $200 and the name and address of the contributor are not known
the official agent has to send a cheque for the ineligible amount (that is, the amount over $20 or $200) without delay to Elections Canada, payable to the Receiver General for Canada.
The official agent is responsible for ensuring that contributions are in accordance with the rules set out in the Canada Elections Act.
The following contributions are ineligible:
- cash contributions over $20
- contributions from corporations, trade unions, associations and groups
- contributions that exceed the limit
- indirect contributions (no individual can make a contribution that comes from the money, property or services of another person or entity)
- contributions from a person who is not a Canadian citizen or a permanent resident
- contributions an individual makes as part of an agreement to sell goods or services, directly or indirectly, to a registered party or a candidate (for example, a candidate cannot agree to buy campaign signs from a local dealer in exchange for a contribution)
Returning ineligible or non-compliant contributions
The official agent must not accept a contribution that exceeds the limit and should not accept any other type of ineligible contribution.
The official agent has to return or remit a contribution within 30 days of becoming aware that:
- it is ineligible, or
- it was received as part of a regulated fundraising event for which the publication or reporting requirements were not complied with
An ineligible or non-compliant contribution must be returned to the contributor or remitted to Elections Canada, based on whether or not it was used.
A monetary contribution is considered used if the campaign bank account balance fell below the ineligible amount at any time after the contribution was deposited into the bank account.
Flowchart 1 explains how to administer ineligible or non-compliant contributions in different scenarios.
- The official agent deposits a cheque for $625 from a contributor. When he enters the contribution in the books, he notices that the same person has already contributed $1,000 to the candidate's campaign. Within 30 days, assuming the money has not been spent, the official agent has to issue a cheque for the excess amount, $25, and send it to the contributor. He records a returned contribution of $25.
- The official agent receives a cheque for $2,000 from a contributor. As this is obviously an over-contribution, the official agent cannot deposit the cheque. She sends it back to the contributor uncashed, and no reporting is required.
- An individual makes a non-monetary contribution to the campaign by offering the use of office space. The official agent later realizes that the commercial value of renting the same office is $1,700, which is higher than the contribution limit. The office has been used during the campaign, so he sends a cheque for the excess amount of $100 to Elections Canada, payable to the Receiver General for Canada. He records a contribution of $1,700, a returned contribution of $100 and an election expense of $1,700.
- The official agent receives a notice from Elections Canada a couple of months after election day. It states that a person who contributed $900 to both the registered association and the candidate exceeded the annual limit by $200 with the contribution to the candidate. Since the deposit date of the contribution, the campaign bank account balance had fallen below the ineligible amount of $200 and the funds were therefore used. The official agent must remit $200 within 30 days of becoming aware of the contravention. To obtain funds, she could organize a fundraising event or request that the registered association or the party repay the $200 on the candidate's behalf. Once the money is available, the official agent sends a cheque for the excess amount to Elections Canada, payable to the Receiver General for Canada. She records a returned contribution of $200.
Note: These examples use the limits in effect for 2019.
Flowchart 1: Returning ineligible or non-compliant contributions
*A monetary contribution was used if the campaign bank account balance fell below the ineligible amount at any time after the contribution was deposited into the bank account.
**For example, the contributor's address is known and there are no obstacles to prevent the return.