Political Financing Handbook for Candidates and Official Agents (EC 20155) – July 2021
This document is Elections Canada's guideline OGI 2021-04.
Click on the link for the latest Political Financing Handbook for Candidates and Official Agents.
7. Electoral Campaign Expenses
This chapter takes a broad look at electoral campaign expenses and how they are administered. It covers the following topics:
- What are electoral campaign expenses?
- How do they relate to non-monetary contributions and transfers?
- Who can incur and pay electoral campaign expenses?
- What invoices have to be kept?
Note: The official agent is responsible for recording electoral campaign expenses and keeping receipts and invoices, as required by the Canada Elections Act. All supporting documentation will have to be submitted to Elections Canada with the Candidate's Electoral Campaign Return.
What are electoral campaign expenses?
The Canada Elections Act defines an electoral campaign expense of a candidate as an expense reasonably incurred as an incidence of the election, regardless of when the expense was incurred.
There are six categories of electoral campaign expenses:
- election expenses
- candidate's personal expenses
- candidate's travel and living expenses
- candidate's litigation expenses
- accessibility expenses
- other electoral campaign expenses
It is important to understand the differences between the expense categories and the way each is administered. The chart below gives an overview and the next six chapters provide details on each one.
Electoral campaign expenses: overview
|Electoral campaign expenses||Examples||Who can incur?||Who can pay and from what source?1||Spending limit?||Reimbursed in part, if conditions met?|
|Candidate's personal expenses||
|Candidate's travel and living expenses||
|Candidate's litigation expenses||
|Other electoral campaign expenses||
Return to source of 1 A person authorized by the official agent can pay petty expenses from the petty cash. The official agent must set the maximum amount that may be paid.
Return to source of 2 The candidate's personal or litigation expenses can be paid directly by another person or group, with the candidate's consent (up to a limit for candidates' representative and "other" personal expenses—see Chapter 9). This is considered to be a payment from the candidate's own funds. It is not a contribution but must still be reported in the candidate's return.
Return to source of 3 If not repaid by the campaign, this is a contribution from the candidate and is subject to the limit.
What qualifies as an electoral campaign expense?
Electoral campaign expenses include:
- amounts paid
- liabilities incurred
- the commercial value of donated property and services (other than volunteer labour)
- the difference between an amount paid or liability incurred and the commercial value of the property or services (when they are provided at less than their commercial value)
The amount charged to the campaign is an electoral campaign expense. Generally this amount is the commercial value of the property or service received.
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
- 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)
In other words, commercial value is generally the amount charged in a store for an item or a service.
- The campaign rents office furniture from an office equipment rental company for four months. The amount charged for the rental is the commercial value, and it is an electoral campaign expense.
- Wendell, a self-employed web designer, offers to design the candidate's website for a discounted price. He charges $400 instead of his regular fee of $700. The commercial value, which is the amount Wendell normally charges for his work (in this case $700), is an electoral campaign expense. The difference between the commercial value and the actual amount paid ($300) is a non-monetary contribution from the web designer.
What does not qualify as an electoral campaign expense?
These penalties under the Canada Elections Act do not count as electoral campaign expenses:
- an administrative monetary penalty imposed on the campaign
- an amount to be paid under a compliance agreement signed with the Commissioner of Canada Elections, solely as a result of that agreement
- an amount to be paid under an undertaking provided to the Commissioner of Canada Elections, solely as a result of that undertaking
This means that the penalties cannot be paid using the candidate's campaign funds.
Non-monetary contributions and transfers are also expenses
The candidate's campaign incurs an electoral campaign expense when it accepts a non-monetary contribution or a non-monetary transfer.
Keep in mind that if a service is provided free of charge by an eligible volunteer, there is no contribution and no expense. See Volunteer labour is not a contribution in Chapter 2, Contributions, for details.
|Received from an individual at no charge||The full commercial value is a non-monetary contribution.*|
|Purchased from an individual for less than commercial value||The difference between the purchase price and the commercial value is a non-monetary contribution.*|
|Received from an affiliated political entity at no charge||The full commercial value is a non-monetary transfer.**|
|Purchased from an affiliated political entity for less than commercial value||The difference between the purchase price and the commercial value is a non-monetary transfer.**|
The full commercial value of the property or service is an electoral campaign expense.
*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 is deemed to be nil and no expense has to be reported.
**All non-monetary transfers provided by the registered party or a registered association must be reported, regardless of commercial value.
- After the election is called, Simon donates office supplies—packages of paper, ink cartridges and binders—to the campaign. Buying the same items in the local stationery store would cost $300; therefore, this is the commercial value of the donated goods. The official agent has to record the following: $300 as a non-monetary contribution from Simon and $300 as an election expense.
- The official agent accepts pamphlets from the registered party. The pamphlets are distributed during the election period. The party pays $2,000 for the pamphlets and provides the official agent with a copy of the original supplier invoice. The official agent has to record the following: a non-monetary transfer of $2,000 from the registered party and an election expense of $2,000.
Note: Some examples in the handbook use "cost" as the amount of an expense. This is because most purchases are made at a retail price. However, if a campaign pays less than a retail price, the expense to report for the property or service is its full commercial value.
Who can incur expenses?
The official agent can incur any type of electoral campaign expense.
The candidate can incur most types of electoral campaign expenses without authorization from the official agent. But they must have written authorization from the official agent to incur election expenses and can only incur the expenses in accordance with that authorization.
Any other person must be authorized in writing by the official agent to incur any type of electoral campaign expense.
An expense is incurred when the campaign becomes legally obligated to pay. The timing will vary based on how the property or service is procured. For example:
- Where a written contract is executed, such as an office lease or a loan agreement, the expense is incurred when the contract is signed.
- Where there is no written contract, the expense is incurred when a verbal agreement is reached. Generally, this is when property or services are ordered or, for retail purchases, at the point of sale.
For a non-monetary contribution of property or services, the expense is incurred when the campaign accepts the contribution.
Who can pay expenses?
Only the official agent can pay electoral campaign expenses in most cases. There are three exceptions:
- The candidate can pay their personal expenses, travel and living expenses, and litigation expenses.
- Any other person or group can pay the candidate's personal expenses or litigation expenses, with the candidate's consent.
- A person authorized in writing by the official agent can pay petty expenses for office supplies, postage, courier services and other incidentals from the petty cash. (The official agent must set the maximum amount that may be paid.)
Note: If the candidate is a party leader, a registered agent of the registered party can also incur expenses for the leader's campaign as a candidate and pay them from the party's bank account.
All invoices have to be submitted to the official agent.
The candidate should send invoices for their personal expenses, travel and living expenses, or litigation expenses to the official agent only after preparing the Candidate's Statement of Expenses.
If an expense of $50 or more was incurred as an incidence of the election, the official agent must keep a copy of the supplier invoice setting out the nature of the expense. Once it is paid, the official agent must also keep the proof of payment.
If an expense of less than $50 was incurred as an incidence of the election, the official agent must keep a record of the nature of the expense. Once it is paid, the official agent must also keep the proof of payment.
For payments made from the petty cash, the person who is authorized to pay petty expenses has to provide the official agent with the documents mentioned above within three months after election day.