Site MenuPolitical Financing Handbook for Leadership Contestants and Financial Agents (EC 20195) – draft – October 2021
This document is Elections Canada's draft guideline OGI 2021-08.
Click on the link for the latest Political Financing Handbook for Leadership Contestants and Financial Agents.
8. Leadership Contest Expenses
This chapter explains what leadership contest expenses are and gives typical examples. It covers the following topics:
- What are leadership contest expenses?
- Who can incur and pay leadership contest expenses?
- Limits on leadership contest expenses
- Typical leadership 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 leadership contest expenses?
A leadership contest expense is:
- any cost incurred or non-monetary contribution received by a leadership 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 leadership contestant during a leadership 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 leadership contestant during a leadership contest
The concept of "directly promoting or opposing a leadership 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 leadership contest expenses, unless they:
- fall into another category (see an overview in Chapter 7, Leadership Campaign Expenses)
- are non-promotional fundraising expenses (see Chapter 6, Fundraising)
The leadership contest period runs from the contest start date to end date (contest day) indicated in the leadership contest report provided by the registered party.
Who can incur and pay leadership contest expenses?
The financial agent, the leadership contestant or an authorized leadership campaign agent can incur leadership contest expenses.
Only the financial agent or an authorized leadership campaign agent is allowed to pay leadership contest expenses, other than petty expenses paid from the petty cash with the financial agent's written authorization.
Limits on leadership contest expenses
The Canada Elections Act does not set a limit on leadership contest expenses.
Registered parties usually set their own rules, in addition to those in the Canada Elections Act, for holding leadership contests. They may provide other restrictions on political financing aspects of the contest, which they administer themselves (e.g. expenses limits for leadership contestants). As long as these rules do not conflict with the requirements of the Canada Elections Act, this is acceptable.
Typical leadership contest expenses
The following are examples of typical leadership contest expenses.
Advertising expenses
Advertising is the transmission to the public of an advertising message promoting or opposing a leadership contestant.
Expenses incurred for advertising conducted during the leadership contest period, including the cost of production and distribution, are reported as leadership contest expenses.
Examples
- The financial agent purchases flyers before the contest starts and mails them to party members during the contest period to promote the contestant. The expense for the flyers—including their design, printing and distribution—is a leadership contest expense.
- The contestant's campaign hires a media firm to place banners on websites and social media platforms during the contest period, directing users to a video posted on YouTube. The placement cost for the banners is a leadership contest expense, together with all expenses related to designing and developing the video.
Note: Unlike other political entities, when a leadership contestant's campaign runs ads online in a pre-election or election period, the ads do not have to be filed in a platform's political advertising registry.
Websites and web content
Leadership 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 leadership contest expense, taking into account the purpose of the material.
| Type of website or web content | Leadership contest expense |
|---|---|
| Campaign's website and social media accounts | The expenses incurred for the campaign website itself—including its design, hosting and maintenance—are leadership contest expenses. Expenses to produce and distribute content on the website or social media accounts are also leadership contest expenses. Because the site and accounts exist for the purpose of the campaign, all content that is online during the contest period counts as a leadership contest expense, regardless of when it was posted. If content was produced entirely or in part using volunteer labour, only the actual expense incurred by the contestant is a leadership contest expense. This may include materials, equipment rental or paid labour. |
| Contestant's personal website and social media accounts | A contestant's pre-existing personal website is a leadership contest expense if it is used for the purpose of the campaign. 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 leadership contest expenses. Pre-existing content is only an expense if it was posted for the purpose of the campaign or promoted during the campaign. The expenses are also non-monetary contributions from the contestant. However, if the contestant did not incur any expenses for the website or web content, there is no expense or contribution to report. |
| Parliamentarian's website or social media accounts | See the Use of parliamentary resources section below. |
Examples
- A group page has been created for the contestant on a free social networking site. Volunteers manage the page and post articles related to the leadership contestant. As long as the volunteers are helping outside their regular working hours and are not self-employed in the business of managing social media, the volunteer labour is not an expense.
- The financial agent hires a media firm to post content on the contestant's website, promoting the campaign. All expenses related to designing, developing and posting the content are leadership contest expenses.
- The contestant has a personal Twitter account and continues to tweet from that account during the contest period. Sometimes she tweets about her campaign. If the contestant is tweeting for free, there is no expense to report.
OGI reference
For a detailed discussion of a similar topic, please refer to Elections Canada's interpretation note 2018-04, Pre-existing Web Content of Registered Parties in an Election, on the Elections Canada website.
Mass text messaging
When a leadership 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 leadership contest expenses.
While they may result in leadership 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 it is recommended 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."
Surveys
Expenses related to surveys or research conducted during the contest period are leadership contest expenses. Expenses related to surveys or research conducted outside the contest period are not leadership contest expenses, even if the results of the survey are used during the contest.
Example
During the contest period, the financial agent engaged Election Polling Inc. for $1,500 to conduct a survey. Once the survey was completed, the financial agent issued a cheque from the campaign bank account to pay Election Polling Inc., recorded the amount as a leadership contest expense and kept the invoice to submit later with the contestant's return.
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 leadership 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 leadership 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 leadership 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 leadership 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 leadership 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 party or to a registered association of the party. The assets themselves cannot be transferred.
Examples
- The contestant's campaign rents two computers from a local office supplier for $600 during the contest period. The rental agreement is for three months (92 days) and extends 15 days past the end of the contest period. The cost of renting the computers during the contest period is a leadership contest expense, and it is calculated as follows: $600 / 92 x (92 – 15) = $502.17. The remaining amount, $97.83, is recorded as an other leadership campaign expense.
- The financial agent pays $100 at a garage sale for the purchase of a printer for the campaign. The commercial value of renting a similar printer during the contest period would have been $150. The financial agent records $100 as a leadership contest expense since the purchase price, $100, is lower than the rental rate.
- A volunteer uses his personal laptop to do work for the campaign during the contest period. The commercial value of renting a similar laptop for the 40-day contest period would be $80. This is a non-monetary contribution from the volunteer. However, because the amount is $200 or less and the volunteer is not in the business of providing electronics, the non-monetary contribution is deemed to be nil and there is no expense to report.
Rental of a campaign office
The campaign may rent an office for the leadership contestant's campaign. Only the portion of the rent used during the contest period is a leadership contest expense. The portion of the rent used before and after the contest period is an other leadership campaign expense.
Example
The campaign rents an office on March 1, two weeks before the contest period starts. Contest day is September 30. The rental agreement is for seven months and the rent is $300 a month.
The leadership contest expense to be recorded is the rent for the six months of April to September, plus the rent for 17 days in March: ($300 x 6) + (17 / 31 x $300) = $1,964.52. The remaining amount, $135.48, is recorded as an other leadership campaign expense.
Installation and other office expenses
The expense incurred to install items used during the contest period is a leadership contest expense even if the installation takes place before the contest is called, as long as the item itself is a leadership 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.
Examples
The campaign pays $500 in labour for a worker to install telephones, computers and printers in the office before the contest starts. The full $500 is a leadership contest expense because the installed equipment is used during the contest period.
The campaign also pays a monthly rate of $200 for telephone usage. The prorated cost for days during the contest period is a leadership contest expense, while the prorated cost for days outside the contest period is an other leadership campaign expense.
Cell phones
A leadership 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 leadership 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, 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 leadership 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 commercial value of its use is $200 or less per transaction (for example, 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.
Examples
- The leadership contestant's campaign rents cell phones for its workers at a cost of $1,000 per month, including usage fees. The contest period starts on February 1 and ends on June 20. The leadership contest expense is the rental cost for four months and 20 days: (4 x $1,000) + ($1,000 / 30 x 20) = $4,667. The remaining amount, $333, is as an other leadership campaign expense.
- Ling, a contestant, uses her own cell phone for campaigning during the contest period. This use must be accounted for. Ling's monthly plan is $120. Because the plan is $200 or less, Ling could make a non-monetary contribution of the commercial value of the plan, and it would be deemed nil. However, the campaign has agreed to reimburse the expense. The leadership contest expense is the cost of Ling's plan prorated for the length of the contest period.
Campaign workers and related expenses
The leadership contestant's campaign may have to report various leadership 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 leadership 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 or 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.
Examples
- Late one night during the contest period, volunteers help in the campaign office to prepare hundreds of flyers for mailing. A volunteer orders pizza and pays the delivery person $85 with their personal credit card. The campaign reimburses the volunteer a few weeks later. The amount of $85 is a leadership contest expense.
- A volunteer is driving around in her own car to deliver flyers during the contest period. She pays $30 to fill up her car. If the amount is not reimbursed by the campaign, the volunteer made a non-monetary contribution. However, because the amount is less than $200, the non-monetary contribution is deemed to be nil and no expense has to be reported.
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 leadership contest expense, the travel expense in both directions is a leadership contest expense. This includes return trips after contest day.
Temporary lodging and meals (or per diems) are also a leadership 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 leadership contestant, some of the cost may be a leadership contest expense and some may be the contestant's travel and living expense. See Chapter 10, Leadership Contestant's Travel and Living Expenses.
| Travel and living expense of campaign workers | Timing | Reported as |
|---|---|---|
| Travel to and from destination | Days during or outside contest period | Leadership contest expense |
| Lodging and meals | Days during contest period Days outside contest period |
Leadership contest expense Other leadership campaign expense |
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 leadership contest expenses.
Examples
- The campaign rents a bus to transport volunteers to one of the leadership contestant’s speaking events during the contest period. It spends $600 on the rental and another $100 on refreshments for the volunteers. The $700 is a leadership contest expense.
- The campaign relocates a worker, Gordon, to its headquarters for one month of the contest period. The round-trip flight is $800. It is a leadership contest expense even if Gordon flies outside the contest period. Gordon has free lodging with a relative and receives a per diem of $25. Since he travelled for 30 days during the contest period and 2 days outside it, the per diems result in a leadership contest expense of $750 ($25 x 30) and an other leadership campaign expense of $50 ($25 x 2). The expenses to record for Gordon’s relocation are a leadership contest expense of $1,550 ($800 + $750) and an other leadership campaign expense of $50.
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 2, Contributions.
For work performed during the contest period, compensation is almost always a leadership contest expense. Before the contest period, it is occasionally a leadership contest expense. It is never a leadership 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.
| Timing | Compensated work: examples | Reported as | Why |
|---|---|---|---|
| Before contest period | Planning, budgeting, creating contact lists | Other leadership campaign expense | Research-style activities are leadership contest expenses only during the contest period |
| Distributing flyers one week before the contest period | Other leadership campaign expense | The communication has been fully transmitted before the contest period | |
| Producing social media content for use during the contest period | Leadership contest expense | The communication will be used during the contest period to promote/oppose a contestant | |
| During contest period | General campaign work | Leadership contest expense | Most work during the contest period is done to promote/oppose a contestant |
| Processing contributions | Other leadership campaign expense | Certain fundraising work is excepted from leadership contest expenses (see Chapter 6) | |
| After contest period | Any work | Other leadership campaign expense | Work done after the contest period does not promote/oppose a contestant during a contest period |
Example
Leslie, a leadership contestant, is paying her financial agent $500 for work done before the contest period, including budgeting, signing contracts and preparing lists of volunteers. The $500 is an other leadership campaign expense. A portion of the $500 could be a leadership contest expense if the output of the work, such as a campaign website, voter contact script or launch party, is tied to a specific activity during the contest period. Leslie is paying her financial agent another $1,000 for general work during the contest period. The $1,000 is a leadership contest expense.
High-profile campaigners and invited guests
Parliamentarians or celebrities will sometimes campaign with a leadership 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 leadership 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 leadership 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 leadership 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 leadership 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 leadership contest expense, whether paid by the contestant or contributed by the celebrity.
Examples
- The leadership contestant invites Faiza, a celebrity who sometimes charges for speaking engagements, to give a speech at a campaign rally. Faiza supports the contestant and can choose to speak for free. She does not have to charge for her participation or make a contribution of its commercial value. Faiza did not have to travel to attend the event, and the campaign incurred no additional expenses for her to participate. There is no contribution or leadership contest expense to report for her participation.
- Clydie G, a famous Canadian musician, is touring during the contest period and plays a show in Vancouver. The next day, he flies to Victoria to join a leadership contestant on stage at a rally and performs a song. He then flies back to continue his tour. The cost of the round-trip flight is $400. It is a leadership contest expense that must be paid by the contestant or contributed by Clydie G. For the performance itself, because Clydie G is self-employed as a musician, he cannot volunteer the service. The commercial value of the performance is a leadership contest expense that the contestant must pay or Clydie G must contribute.
- A senator plans to speak at a rally for a leadership contestant from her home province. The senator was already in the province, but she pays $200 in gas to drive to the city where the rally is being held. This is a non-monetary contribution from the senator. Because it is $200 or less, it is deemed nil and no expense is reported.
Use of parliamentary resources
Leadership contestants who are parliamentarians might sometimes make use of parliamentary resources, such as websites and office staff, for their leadership campaigns.
The use of parliamentary resources during the contest period is a leadership 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 use of parliamentary resources is governed by other rules as well, including the Members By-law of the House of Commons (available on the Parliament of Canada website).
OGI reference
For a detailed discussion of a related topic, please refer to Elections Canada's interpretation note 2020-04, The Use of Member of Parliament Resources Outside of an Election Period, on the Elections Canada website.
Staff of a parliamentarian
If employees on the staff of a parliamentarian engage in political activities to support the parliamentarian as a leadership contestant during the contest period, the salaries of these persons are leadership 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 leadership contest expense nor a non-monetary contribution.
Website and social media accounts of a parliamentarian
Leadership contestants may have websites and social media accounts that are designed and maintained using parliamentary resources.
If the leadership contestant uses the website for the purpose of their campaign, its commercial value—including design, maintenance and hosting—is a leadership 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 leadership contest expenses. Pre-existing content is only an expense if it was posted for the purpose of the campaign or promoted during the campaign.