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Political Contributions by Individuals

New Rules on January 1, 2004

New rules for individuals making political contributions came into effect on January 1, 2004. The rules are part of important changes to the Canada Elections Act made by Parliament in June 2003.

This backgrounder summarizes the main changes affecting individuals in the amended Canada Elections Act, and is not intended to be a comprehensive outline of the Act's new provisions. Six other backgrounders summarize changes affecting corporations and trade unions, registered political parties, electoral district associations, candidates, nomination contestants and leadership contestants.

The most significant changes affecting individuals concern contributions and income tax credits.

Limits on contributions

Any individual who is a Canadian citizen or permanent resident of Canada may make these contributions:

up to $5,000* in total in a calendar year to a particular registered political party and its registered electoral district associations, nomination contestants and candidates
up to $5,100* in total to the leadership contestants of a registered political party in a particular leadership contest
up to $5,100* in total to a candidate for a particular election who is not the candidate of a registered political party

A registered party or electoral district association (often called a riding association or constituency association) is one that is registered with the Chief Electoral Officer of Canada. Among other privileges and obligations, registration allows the party or association to issue income tax receipts for contributions, and obliges it to make regular public reports on its finances.

An individual who is a nomination contestant, candidate or leadership contestant may also make the following additional contributions out of his or her own funds to his or her own campaign:

by a nomination contestant or candidate of a registered party, up to $5,000* in total for both the nomination and election campaigns
by a leadership contestant of a registered party in a particular leadership contest, up to $5,000*, or
by a candidate for a particular election who is not the candidate of a registered party, up to $5,000*

Contributions made to a leadership contestant within 18 months after a leadership contest are considered to be contributions for that contest.

Contribution limits are adjusted annually for inflation*.

Unlimited contributions

There are no limits to these contributions by an individual:

an unconditional, non-discretionary contribution ("testamentary disposition") made in the individual's will
contributions to a political party that is not registered or to its electoral district associations (these contributions are not eligible for income tax credits)

Indirect contributions

Making an indirect contribution is an offence. That is, an individual must not make a political contribution that comes from the money, property or services of another person or entity (including companies, unions and associations), if that other person or entity gave it to the individual to make a political contribution. The prohibition applies to indirect contributions to a registered party, a registered association, a candidate, a nomination contestant and a leadership contestant.

Nevertheless under certain circumstances, an unincorporated organization or association is allowed to make contributions to a registered electoral district association, a nomination contestant or a candidate that come from money provided for that purpose by an individual who is a Canadian citizen or permanent resident of Canada. The total contributions must not exceed:

$1,000* in total in any calendar year to a registered electoral district association, a nomination contestant or a candidate of a registered party
$1,000* in total to a candidate for a particular election who is not the candidate of a registered party

With each contribution the association must also provide a statement containing the following information:

the name and address of the individual who is responsible for the association
the amount of the contribution
the name and address of each individual whose money forms part of the contribution, the amount of money provided by that individual included in the contribution, and the date on which it was provided

Membership fees

An individual's membership fee in a registered party is not a contribution, so long as the fee is not more than $25 per year for up to five years, the fee is paid out of the individual's own funds and the individual is eligible to make contributions.

Income tax credits

When Parliament changed the Canada Elections Act, it also changed the Income Tax Act to allow higher income tax credits for political contributions by an individual:

for contributions up to $400, a credit of 75 percent (for example, a $300 credit for a contribution of $400)
for contributions from $401 to $750, a credit of $300 plus 50 percent of the amount over $400 (for example, a $475 credit for a contribution of $750)
for contributions over $750, the lesser of $650 or $475 plus 33⅓ percent of the amount over $750 (for example, a $650 credit for a contribution of $1,275)

Unlike most deductions, the credits are deducted directly from the income tax to be paid. The credits apply to monetary contributions – supported by authorized receipts – to a registered party, a provincial division of a registered party, a registered electoral district association or a candidate. Tax credits are not available for contributions to nomination and leadership contestants.

Any person authorized to accept political contributions must issue a receipt for each contribution over $25.

Offences and punishment

The Act itemizes a number of offences that an individual must not commit, such as circumventing or attempting to circumvent or collude in circumventing the rules for ineligible contributors, for concealing a contributor's identity and for contribution limits.

Depending on the seriousness of the offence and the type of court proceeding, maximum penalties include a fine of $1,000 to $25,000, or imprisonment for a term of up to five years, or both. The court may also impose additional penalties, such as performing community service and compensating for damages.

Registration and Political Financing of Leadership Contestants –

New Rules on January 1, 2004

New rules for contestants for the leadership of a registered political party came into effect on January 1, 2004. The rules are part of important changes to the Canada Elections Act made by Parliament in June 2003.

If a leadership campaign is already in progress on January 1, 2004, the new rules do not apply to that campaign.

This backgrounder summarizes the main changes affecting leadership contestants in the amended Canada Elections Act, and is not intended to be a comprehensive outline of the Act's new provisions. Six other backgrounders summarize changes affecting individuals, corporations and trade unions, registered political parties, electoral district associations, candidates and nomination contestants.

The most significant changes affecting leadership contestants concern registration, contributions, financial reports and public disclosure of information.

Registration of contestants

Anyone who accepts a contribution for his or her campaign for the leadership of a registered political party, or incurs leadership campaign expenses, must apply to the Chief Electoral Officer to register as a leadership contestant. The application must include:

the contestant's name and the address where his or her records are kept
the names and addresses of the contestant's financial agent and auditor, and their signed consent
a signed declaration from the party's chief agent certifying that the party accepts the applicant as a leadership contestant
the total contributions received by the contestant before the application, and the number of contributions
the name and address of each contributor who made contributions totalling more than $200, the total amount of these contributions, the amount of each contribution and the date on which each was received by the contestant

The Chief Electoral Officer must register a contestant who meets these requirements in a registry containing the names and addresses of the contestant and of his or her financial agent and auditor.

Contestants' agents and auditors

A leadership contestant must appoint:

one financial agent, who is responsible for administering the contestant's financial transactions for the campaign and reporting on those transactions
one auditor, who is responsible for preparing an audit report on the leadership campaign return if the contestant has accepted $5,000 or more in contributions, or incurred campaign expenses of $5,000 or more

The Act gives details on who are eligible and ineligible to serve as financial agents and auditors, and how the financial agent must handle the contestant's bank account, ineligible contributions, leadership campaign expenses and claims for payment of leadership campaign expenses.

Leadership campaign expenses include personal expenses.

A leadership contestant may also appoint leadership campaign agents, who are authorized to accept contributions and to incur and pay campaign expenses.

Limits on contributions

Any individual who is a Canadian citizen or permanent resident of Canada may contribute up to $5,100* in total to the leadership contestants of a registered political party in a particular leadership contest. No other person or entity (including companies, unions and associations) may make a contribution to a leadership contestant.

An individual who is a leadership contestant may also contribute an additional $5,000* out of his or her own funds to his or her own campaign.

Contributions made to a leadership contestant within 18 months after the leadership contest are considered to be contributions for that contest.

Contribution limits are adjusted annually for inflation*.

Unlimited contributions

There is no limit to a contribution made in an individual's will as an unconditional, non-discretionary contribution ("testamentary disposition").

Transferring funds

A transfer of funds is allowed and is not considered to be a contribution if it is:

from a leadership contestant of a registered party to the party or a registered association of the party, or
from a registered party to a leadership contestant with funds from a directed contribution

A directed contribution is all or part of a contribution made to a registered party by a contributor who requests in writing that the amount be transferred to a particular leadership contestant. The directed contribution is considered to be a contribution made by the contributor to the contestant.

Providing goods and services

A registered party or an electoral district association of a registered party may provide goods or services to a leadership contestant only if it offers the goods or services equally to all contestants.

Receipts

Any person authorized to accept contributions to a leadership contestant must issue a receipt for each contribution over $25.

If the organizers of a contestant's campaign meeting or fundraising event collect anonymous contributions of $25 or less per person, the person authorized to accept those contributions must record a description of the function and its date, the approximate number of people present, and the total amount of anonymous contributions accepted.

No income tax credit

Income tax credits are not available for contributions to leadership contestants.

Contestant's reports and statement

In addition to the information required in the application for registration, a leadership contestant must:

within 30 days of appointing a leadership campaign agent, give the Chief Electoral Officer a written report that includes the name and address of the agent and any terms and conditions of the appointment; the report must be certified by the financial agent
within 30 days after any change in the information in the application for registration, give the Chief Electoral Officer a written report of the change (if the change involves the replacement of the auditor or the financial agent, it must include a copy of his or her signed consent to the appointment)
within five months after the end of the campaign, give his or her financial agent a written statement concerning personal expenses, either declaring that he or she did not pay for any personal expenses, or setting out the amount of any personal expenses that he or she paid and details of those expenses, including documentation of their payment

Financial agent's initial return on contributions

The contestant's financial agent must give the Chief Electoral Officer a return on contributions for the period beginning on the first day of the leadership contest and ending on the day that is four weeks before the end of the leadership contest. The return is due no later than one week after the end of the period, and must include:

the total contributions received by the leadership contestant and the number of contributors
all financial loans for the campaign, including interest rates, repayment schedules and the names of the lenders
the name and address of each contributor who made contributions of a total amount of more than $200 to the leadership contestant, the total amounts from each contributor, the amount of each contribution, and the date on which it was received by the contestant
the name and address of each contributor who made a contribution that includes a directed contribution transferred by the party to the contestant, the amount of the contribution, the amount of the directed contribution, the amount transferred, and the dates of the receipt of the contribution and of the transfer
a statement of the commercial value of goods or services provided and of funds transferred by the leadership contestant to a registered party or a registered association
a statement of contributions received but returned to the contributor or otherwise dealt with in accordance with the Act

Financial agent's next three weekly returns on contributions

For each of the next three weeks after the initial period (that is, after the period ending four weeks before the end of the contest), the financial agent must provide the Chief Electoral Officer with a weekly return on contributions containing the same kinds of information as the initial return. Each weekly return is due no later than one week after the end of the week that it covers.

Financial agent's final campaign return

Within six months after the end of the leadership contest, the financial agent must provide the Chief Electoral Officer with a full leadership campaign return on all the financing and campaign expenses of the whole campaign. In addition to the same categories of information required on the returns on contributions, the leadership campaign return must include:

a statement of leadership campaign expenses
a statement of disputed claims before a court
a statement of unpaid claims that are, or may be, the subject of an application to the Chief Electoral Officer or a judge to authorize payment

Several items must accompany the return:

the auditor's report on the return, if the contestant accepted $5,000 or more in contributions, or incurred campaign expenses of $5,000 or more
the financial agent's declaration that the return is complete and accurate
the leadership contestant's declaration that the return is complete and accurate
documents giving evidence of the expenses in the return, including bank statements, deposit slips and cancelled cheques
the contest's written statement of personal expenses

After closing the campaign's bank account, the financial agent must give the Chief Electoral Officer the final statement of the account.

Auditor's report

If the contestant accepted $5,000 or more in contributions, or incurred campaign expenses of $5,000 or more, the contestant's auditor must report to the contestant's financial agent on the leadership campaign return as soon as possible after the end of the leadership contest. In accordance with generally accepted auditing standards, the auditor must make any examination that will enable him or her to give an opinion in the report about whether the return fairly presents the information contained in the financial records on which it is based.

The report must include any statement that the auditor considers necessary if:

the campaign return does not fairly present the information contained in the financial records on which it is based
the auditor has not received from the contestant or the financial agent all the information and explanation that the auditor required, or
based on the examination, it appears that the financial agent has not kept proper accounting records

Disposal of surplus campaign funds

The surplus amount of leadership campaign funds is the amount by which the sum of directed contributions, contributions accepted by the campaign agents and any other contributions received by the contestant exceeds the sum of the leadership campaign expenses paid and any transfers from the contestant to a registered party or association of the party.

The contestant's financial agent must transfer any surplus campaign funds to the registered party that is holding the leadership contest or to a registered association of that party. This disposal must take place:

either within 60 days after receiving a notice of estimated surplus from the Chief Electoral Officer, or
within 60 days after providing the contestant's final campaign return to the Chief Electoral Officer if the financial agent has not received a notice of estimated surplus

Within seven days, the financial agent must give the Chief Electoral Officer a notice of the amount and date of the disposal and to whom the surplus was transferred. The Chief Electoral Officer then publishes the notice.

Public disclosure of information

As soon as possible after receiving them, the Chief Electoral Officer must publish:

a notice containing the dates on which a leadership contest is to begin and end, supplied in a statement from the chief agent of a registered party
a notice containing any variations in the dates or cancellation of the contest, supplied in a statement from a registered party
the leadership campaign returns of leadership contestants
the financial agents' initial returns on contributions
the financial agents' three weekly returns on contributions
any updated versions of the campaign returns and returns on contributions
all statements in the contestants' applications for registration concerning contributions received before the applications
the lists of claims deemed to be contributions and submitted by the leadership contestants or financial agents 18 months after the end of the contest
the notices of disposal of surplus campaign funds submitted by the financial agents

Publication may take place in any manner that the Chief Electoral Officer considers appropriate.

All reports and formal statements concerning leadership campaigns are public records, and anyone may inspect them or get copies of them on request. In addition to the information published by the Chief Electoral Officer, they include:

the auditor's reports on the leadership campaign return
declarations by the financial agents and leadership contestants that their leadership campaign returns are complete and accurate
documents giving evidence of the expenses in the returns
any updates concerning claims and payments
all instructions, decisions and rulings by the Chief Electoral Officer on points about leadership campaigns arising under the Act

Offences and punishment

The Act itemizes numerous offences, ranging from a failure to register for a leadership contest and knowingly accepting a prohibited contribution to providing a document containing false, misleading or incomplete information.

Political Financing of Candidates –

New Rules on January 1, 2004

New rules for the financing of federal election candidates came into effect on January 1, 2004. The rules are part of important changes to the Canada Elections Act made by Parliament in June 2003.

This backgrounder summarizes the main changes affecting candidates in the amended Canada Elections Act,and is not intended to be a comprehensive outline of the Act's new provisions. Six other backgrounders summarize changes affecting individuals, corporations and trade unions, registered political parties, electoral district associations, leadership contestants and nomination contestants.

The most significant changes affecting candidates concern contributions and the reimbursement of expenses.

Limits on contributions by individuals

Any individual who is a Canadian citizen or permanent resident of Canada may make these contributions:

up to $5,000* in total in a calendar year to a particular registered political party and its registered electoral district associations, nomination contestants and candidates
up to $5,100* in total to a candidate for a particular election who is not the candidate of a registered political party

A candidate may also contribute an additional $5,000* out of his or her own funds to his or her own election campaign. For a candidate of a registered party, the additional $5,000* is the total amount allowed for both the nomination and election campaigns.

Contribution limits are adjusted annually for inflation*.

Unlimited contributions

There is no limit to a contribution made in an individual's will as an unconditional, non-discretionary contribution ("testamentary disposition").

Limits on contributions by corporations and trade unions

A corporation or trade union may contribute:

up to $1,000* in total in any calendar year to the registered associations, nomination contestants and candidates of a particular registered party
up to $1,000* in total to a candidate for a particular election who is not the candidate of a registered party

Certain corporations and trade unions are not eligible to make a contribution:

a corporation that does not carry on business in Canada
a trade union that does not hold bargaining rights for employees in Canada
a corporation that is wholly and directly owned by the Crown, and its wholly owned subsidiary, or
a corporation that receives more than 50 percent of its funding from the federal government

A special provision applies if two elections are held in an electoral district in a single calendar year, and a corporation or trade union has already made a contribution to the candidate of a registered party in that electoral district before the first election day. In that case, the corporation or trade union may make further contributions of up to $1,000* to the candidate of the registered party in the same electoral district during the election period for the second election.

Another special provision concerns a contribution to an unsuccessful nomination contestant. A corporation or trade union may have made a contribution to a nomination contestant in an electoral district, but the contestant is not endorsed by the registered party as its candidate. In that case, during the same year the corporation or trade union may make contributions not exceeding $1,000* in total to the endorsed candidate after he or she is endorsed. Those contributions to the candidate of a registered party are allowed only for one election in one electoral district in any calendar year.

Indirect contributions

A candidate must not normally receive an indirect contribution – one that comes from the money, property or services of another person or entity (including companies, unions and associations), if that other person or entity gave it to the contributor to make a contribution to the candidate.

Nevertheless under certain circumstances, an unincorporated organization or association is allowed to make contributions to a candidate that come from money provided by an individual who is a Canadian citizen or permanent resident of Canada. The contributions must not exceed:

$1,000* in total in any calendar year to the candidate of a registered party
$1,000* in total to a candidate for a particular election who is not the candidate of a registered party

With each contribution, the association must also provide a statement containing the following information:

the name and address of the individual who is responsible for the association
the amount of the contribution
the name and address of each individual whose money forms part of the contribution, the amount of money provided by that individual included in the contribution, and the date on which it was provided

A special provision applies if two elections are held in an electoral district in a single calendar year, and an unincorporated association has already made an indirect contribution to the candidate of a registered party in that electoral district before the first election day. In that case, the association may make further contributions of up to $1,000* to the candidate of the registered party in the same electoral district during the election period for the second election.

Another special provision concerns a contribution to an unsuccessful nomination contestant. An unincorporated association may have made a contribution to a nomination contestant in an electoral district, but the contestant is not endorsed by the registered party as its candidate. In that case, during the same year the unincorporated association may make contributions not exceeding $1,000* in total to the endorsed candidate after he or she is endorsed. Those contributions to the candidate of a registered party are allowed only for one election in one electoral district in any calendar year.

Transferring funds

A transfer of funds is permitted and is not considered to be a contribution if it is:

from a registered party to a candidate endorsed by the party
from a registered association to a candidate endorsed by the party with which it is affiliated
from a candidate endorsed by a registered party to the party or a registered association of the party
from a candidate to himself or herself in his or her capacity as a nomination contestant in the same election, or
from a nomination contestant of a registered party to the official agent of the candidate endorsed by the party in the electoral district in which the nomination contest was held

A candidate of a registered party may not transfer to the party any amount:

received as an indirect contribution from an unincorporated association (see the Indirect contributions section above), or
received from a corporation or a trade union that made an allowable contribution of up to $1,000 in total in any calendar year to the registered associations, nomination contestants and candidates of a particular registered party

Providing goods and services

Providing goods or services is permitted and is not considered to be a contribution if it is:

from a registered party to a candidate endorsed by the party
from a registered association to a candidate endorsed by the party with which it is affiliated
from a candidate endorsed by a registered party to the party or a registered association of the party, or
from a candidate to himself or herself in his or her capacity as a nomination contestant in the same election

Providing paid leave of absence

Providing paid leave of absence is permitted and is not considered to be a contribution if it is:

provided by an employer who is eligible to make a contribution
provided during an election period to an employee to allow him or her to be a candidate

Receipts

The official agent must issue a receipt for each contribution over $25.

If the official agent organizes a candidate's campaign meeting or fundraising event and collects anonymous contributions of $25 or less per person, the official agent must record a description of the function and its date, the approximate number of people present, and the total amount of anonymous contributions accepted.

Income tax credit

When Parliament changed the Canada Elections Act, it also changed the Income Tax Act to allow higher income tax credits for political contributions by an individual:

for contributions up to $400, a credit of 75 percent (for example, a $300 credit for a contribution of $400)
for contributions from $401 to $750, a credit of $300 plus 50 percent of the amount over $400 (for example, a $475 credit for a contribution of $750)
for contributions over $750, the lesser of $650 or $475 plus 33⅓ percent of the amount over $750 (for example, a $650 credit for a contribution of $1,275)

The credits apply to monetary contributions – supported by authorized receipts – to a registered party, a provincial division of a registered party, a registered electoral district association and a candidate.

New allowable expense

A new allowable election expense for candidates is the cost of – or a non-monetary contribution to – conducting election surveys or other surveys or research during an election period.

Reimbursement of expenses

Immediately after the return of the writ in an election, a candidate who receives 10 percent or more of the valid votes cast is eligible for the first installment of a reimbursement payment from public funds for his or her election expenses and personal expenses. Previously the candidate had to receive 15 percent of the votes to be eligible.

The candidate is eligible for payment of the final installment after the official agent gives the Chief Electoral Officer the candidate's electoral campaign return and associated documents. That installment is the lesser of:

60 percent of the sum of the candidate's paid election expenses and paid personal expenses, less the partial reimbursement, or
60 percent of the maximum election expenses allowed for the election, less the partial reimbursement.

Previously the portion was 50 percent.

Offences and punishment

The Act itemizes a number of offences, such as attempting to circumvent or collude in circumventing the rules for ineligible contributors, for concealing a contributor's identity and for contribution limits.

Financing of Registered Political Parties –

New Rules on January 1, 2004

New rules for financing registered political parties came into effect on January 1, 2004. The rules are part of important changes to the Canada Elections Act made by Parliament in June 2003.

This backgrounder summarizes the main changes affecting the financing of registered parties in the amended Canada Elections Act, and is not intended to be a comprehensive outline of the Act's new provisions. Six other backgrounders summarize changes affecting individuals, corporations and trade unions, electoral district associations, candidates, nomination contestants and leadership contestants.

The most significant changes affecting parties concern contributions, public funding and election expenses.

Limit on contributions

Any individual who is a Canadian citizen or permanent resident of Canada may contribute up to $5,000* in total in a calendar year to a particular registered party and its registered electoral district associations, nomination contestants and candidates. No other person or entity (including companies, trade unions and associations) may make a contribution to a registered party.

Only a registered agent of a party can receive contributions to the party.

The contribution limit is adjusted annually for inflation*.

Unlimited contributions

There are no limits to these contributions by an individual:

an unconditional, non-discretionary contribution ("testamentary disposition") made in the individual's will
contributions to a political party that is not registered (these contributions are not eligible for income tax credits)

Transferring funds

A transfer of funds is allowed and is not considered to be a contribution if it is:

from a leadership contestant of a registered party to the party
from a registered association to the party with which it is affiliated
from a candidate endorsed by a registered party to the party
from a nomination contestant of a registered party to the party
from a registered party to an electoral district association of the party or a candidate endorsed by the party, or
from a registered party to a leadership contestant with funds from a directed contribution

A candidate or a nomination contestant of a registered party may not transfer to the party any amount received:

from a corporation or a trade union that made an allowable contribution of up to $1,000* in total in any calendar year to the registered associations, nomination contestants and candidates of a particular registered party, or
from an unincorporated organization that made an allowable contribution of up to $1,000* in total in any calendar year to the registered associations, nomination contestants or candidates of a particular registered party, using money provided by an individual who is a Canadian citizen or permanent resident of Canada

Providing goods and services

Providing goods or services is permitted and is not a contribution if it is:

from a registered association to the party with which it is affiliated
from a candidate endorsed by a registered party to the party, or
from a registered party to an electoral district association of the party or a candidate endorsed by the party

A registered party may provide goods or services to a leadership contestant or a nomination contestant, but only if it offers the goods or services equally to all contestants.

Membership fees

An individual's membership fee in a registered party is not a contribution, so long as the fee is not more than $25 per year for up to five years.

Receipts

Anyone authorized to accept contributions to a registered party must issue a receipt for each contribution over $25.

If the organizers of a party's meeting or fundraising event collect anonymous contributions of $25 or less per person, the person authorized to accept those contributions must record a description of the function and its date, the approximate number of people present, and the total amount of anonymous contributions accepted.

Income tax credits

When Parliament changed the Canada Elections Act, it also changed the Income Tax Act to allow higher income tax credits for political contributions by an individual:

for contributions up to $400, a credit of 75 percent (for example, a $300 credit for a contribution of $400)
for contributions from $401 to $750, a credit of $300 plus 50 percent of the amount over $400 (for example, a $475 credit for a contribution of $750)
for contributions over $750, the lesser of $650 or $475 plus 33⅓ percent of the amount over $750 (for example, a $650 credit for a contribution of $1,275)

The credits apply to contributions – supported by authorized receipts – to a registered party, a provincial division of a registered party, a registered electoral district association, and a candidate.

Public funding by quarterly allowances

All qualifying registered parties now receive quarterly allowances from public funds. To be eligible, a party must have received in the general election preceding the quarter:

at least 2 percent of the valid votes cast, or
at least 5 percent of the valid votes cast in the electoral districts in which the party endorsed a candidate

The size of the fund from which the allowances are paid is determined by multiplying:

$0.4375 multiplied by the total number of valid votes cast in the general election preceding the quarter, by
the inflation adjustment factor for the quarter.

The Act provides the formula for calculating the inflation adjustment factor, which is based on the annual average consumer price index published by Statistics Canada.

Each party's share of the quarterly allowance fund is its percentage of the valid votes cast in the general election preceding the quarter.

Paying the quarterly allowance

As soon as possible after the end of each quarter, the Chief Electoral Officer gives the Receiver General for Canada a certificate setting out a party's allowance payable for that quarter. The Receiver General then pays the party.

A provincial division of a party may receive part or all of the allowance, if the leader of the party authorizes the arrangement.

Postponing a quarterly allowance

If a party does not provide all required documents to the Chief Electoral Officer, he or she must postpone issuing the certificate for payment until the party provides the documents. The required documents are:

the chief agent's financial transactions return for the fiscal period of the party, the auditor's report on the return and the chief agent's declaration
the chief agent's election expenses return, the auditor's report on the return and the chief agent's declaration

Beginning on January 1, 2005, the chief agent's quarterly financial transactions return will also be considered as a required document.

Allowance payments for 2004

For 2004, the first year of the new quarterly allowance system, parties will receive estimated allowances for all four quarters in a single payment by January 31, 2004. If the 2004 estimated payment is more than the amount to which the party is entitled, it must return the excess to the Receiver General.

Maximum election expenses

A registered party is limited in the amount it is allowed to spend for an election. Parliament has raised the maximum amount allowed for election expenses by approximately 13 percent; it is determined by multiplying:

$0.70 multiplied by the number of names on the preliminary lists of electors for electoral districts in which the registered party has endorsed a candidate, or by the number of names on the revised lists of electors for those electoral districts, whichever is greater, by
the inflation adjustment factor in effect on the date of the issue of the writs for the election.

Previously the base amount was $0.62.

A new allowable election expense for a registered party is the cost of – or a non-monetary contribution to – conducting election surveys or other surveys or research during an election period.

Reimbursement of election expenses

A political party that meets the requirements set out in the Act is entitled to a reimbursement from public funds of a portion of its election expenses. Previously the portion was 22.5 percent; it is now 50 percent.

For the first general election held after January 1, 2004, the portion will be 60 percent.

Disclosing electoral funding

Registered political parties must submit comprehensive annual financial reports and election returns after each general election. Beginning on January 1, 2005 a registered party that receives a quarterly allowance must also give the Chief Electoral Officer a quarterly return containing:

the total contributions received by the party and the number of contributors
the name and address of each contributor who made contributions of a total amount of more than $200 to the party, that total amount, the amount of each contribution and the date on which it was received by the party
the name and address of each contributor who has made a contribution to the party that includes a directed contribution (see the Transferring funds section above), the amount of the contribution, the amount of the directed contribution and the date of the receipt of the contribution
a statement of the commercial value of goods or services provided and of funds transferred to the party from any of its registered associations, a candidate, a leadership contestant or a nomination contestant, and
a statement of contributions received by the party but returned in whole or in part to the contributors or otherwise dealt with in accordance with the Act

Each quarterly return is due no later than 30 days after the end of the quarter that it covers.

The quarterly returns are public records, and anyone may inspect them or get copies of them on request. The Chief Electoral Officer regularly publishes the financial transactions return for each fiscal period of a registered party. Among other information, that return includes the information contained in the quarterly returns.

Offences and punishment

The Act itemizes the offences concerning the financing of registered parties, ranging from a failure to provide required financial information to making a prohibited transfer.

Political Financing of Nomination Contestants –

New Rules on January 1, 2004

New rules for the financing of federal nomination contestants came into effect on January 1, 2004. The rules are part of important changes to the Canada Elections Act made by Parliament in June 2003.

This backgrounder summarizes the main changes affecting nomination contestants in the amended Canada Elections Act, and is not intended to be a comprehensive outline of the Act's new provisions. Six other backgrounders summarize changes affecting individuals, corporations and trade unions, registered political parties, electoral district associations, leadership contestants and candidates.

The most significant changes affecting nomination contestants concern contributions, limits on campaign expenses, financial reports and public disclosure of information.

Limits on contributions by individuals to nomination contestants

Any individual who is a Canadian citizen or permanent resident of Canada may contribute up to $5,000* in total in a calendar year to a registered political party and its registered electoral district associations, nomination contestants and candidates.

A nomination contestant may also contribute an additional $5,000* out of his or her own funds to his or her own nomination campaign.

Contribution limits are adjusted annually for inflation*.

Unlimited contributions

There is no limit to a contribution made in an individual's will as an unconditional, non-discretionary contribution ("testamentary disposition").

Limits on contributions by corporations and trade unions

A corporation or trade union may contribute up to $1,000* in total in any calendar year to the registered associations, nomination contestants and candidates of a particular registered party.

Certain corporations and trade unions are not eligible to make a contribution:

a corporation that does not carry on business in Canada
a trade union that does not hold bargaining rights for employees in Canada
a corporation that is wholly and directly owned by the Crown, and its wholly owned subsidiaries, or
a corporation that receives more than 50 percent of its funding from the federal government

A special provision applies if two elections are held in an electoral district in a single calendar year, and a corporation or trade union has already made a contribution to the nomination contestants of a registered party in that electoral district before the first election day. In that case, the corporation or trade union may make further contributions of up to $1,000* to the nomination contestants of the registered party in the same electoral district during the election period for the second election.

Another special provision concerns a contribution to an unsuccessful nomination contestant. A corporation or trade union may have made a contribution to a nomination contestant, but the contestant was not endorsed by the registered party as its candidate. In that case, during the same year the corporation or trade union may make contributions not exceeding $1,000* in total to the endorsed candidate after he or she is endorsed. Those contributions to the candidate of a registered party are allowed only for one election in one electoral district in any calendar year.

Indirect contributions

A nomination contestant must not normally receive an indirect contribution – one that comes from the money, property or services of another person or entity (including companies, unions and associations), if that other person or entity gave it to the contributor to make a contribution to the nomination contestant.

Nevertheless under certain circumstances, an unincorporated organization or association is allowed to make contributions to a nomination contestant that come from money provided by an individual who is a Canadian citizen or permanent resident of Canada. The contributions must not exceed:

$1,000* in total in any calendar year to the nomination contestant of a registered party
$1,000* in total to a nomination contestant for a particular election who is not the nomination contestant of a registered party

With each contribution the association must also provide the financial agent with a statement containing the following information:

the name and address of the individual who is responsible for the association
the amount of the contribution
the name and address of each individual whose money forms part of the contribution, the amount of money provided by that individual included in the contribution, and the date on which it was provided
a declaration from the individual who is responsible for the association that the information is complete and accurate

A special provision applies if two elections are held in an electoral district in a single calendar year, and an association has already made an indirect contribution to the nomination contestants of a registered party in that electoral district before the first election day. In that case, the association may make further contributions of up to $1,000* to the nomination contestants of the registered party in the same electoral district during the election period for the second election.

Transferring funds

A transfer of funds is permitted and is not considered to be a contribution if it is:

from a nomination contestant of a registered party to the party, the registered association of the party that held the nomination contest, or the official agent of the candidate endorsed by the party in the electoral district in which the nomination contest was held, or
from a candidate to himself or herself in his or her capacity as a nomination contestant in the same election

A nomination contestant of a registered party may not transfer to the party any amount:

received as an indirect contribution from an unincorporated organization (see the Indirect contributions section above), or
received from a corporation or a trade union that made an allowable contribution of up to $1,000 in total in any calendar year to the registered associations, nomination contestants or candidates of a particular registered party

Providing goods and services

Providing goods or services is permitted and is not considered to be a contribution if it is from a candidate to himself or herself in his or her capacity as a nomination contestant in the same election.

A registered party or an electoral district association of a registered party may provide goods or services to a nomination contestant only if it offers the goods or services equally to all contestants.

Providing paid leave of absence

Providing paid leave of absence is permitted and is not considered to be a contribution if it is:

provided by an employer who is eligible to make a contribution
provided during an election period to an employee to allow him or her to be a nomination contestant

Receipts

The financial agent of a nomination contestant must issue a receipt for each contribution over $25.

If the financial agent organizes a nomination contestant's campaign meeting or fundraising event and collects anonymous contributions of $25 or less per person, the financial agent must record a description of the function and its date, the approximate number of people present, and the total amount of anonymous contributions accepted.

No income tax credit

Income tax credits are not available for contributions to nomination contestants.

Limits on nomination campaign expenses

The amount that a nomination contestant is allowed to spend for nomination campaign expenses – other than personal expenses – is now limited.

If the boundaries for the electoral district have not changed since the immediately preceding general election, the limit is 20 percent of the limit allowed for a candidate's election expenses in that electoral district during the immediately preceding general election. The Act provides the formula for calculating a candidate's limit, which is based on the number of electors on the electoral district's preliminary or revised lists of electors.

If the boundaries for the electoral district have changed since the immediately preceding general election, the Chief Electoral Officer determines the limit for nomination campaign expenses in the electoral district.

Personal expenses

Personal expenses are reasonable expenses incurred by or on behalf of a nomination contestant in a nomination campaign. They include travel and living expenses, child care expenses, expenses for providing care for a person with a physical or mental incapacity for whom the contestant normally provides care, and in the case of a contestant who has a disability, any additional personal expenses related to the disability.

Within three months after the selection date, a nomination contestant must send to his or her financial agent a written statement that:

sets out the amount of any personal expenses that he or she paid, and details of those expenses, including documentation of their payment, or
declares that he or she did not pay for any personal expenses

Financial agent and auditor

Before a nomination contestant accepts contributions or incurs nomination campaign expenses, he or she must appoint a financial agent. The financial agent is responsible for administering the contestant's financial transactions and for reporting on those transactions. Only the financial agent can accept contributions to the campaign and pay nomination campaign expenses.

As soon as a nomination contestant has accepted contributions of $10,000 or more in total, or incurred nomination campaign expenses of $10,000 or more in total, he or she must appoint an auditor without delay. The nomination contestant must immediately provide the Chief Electoral Officer with the auditor's name, address, telephone number and occupation, and a signed declaration by the auditor accepting the appointment.

Notice of nomination contest

Within 30 days after the selection date, the registered party (or the registered electoral district association, if the contest was held by the association) must file with the Chief Electoral Officer a report setting out:

the name of the electoral district, the registered association and the registered party that the nomination contest concerns
the date on which the nomination contest began and the selection date
the name and address of each nomination contestant as of the selection date and of his or her financial agent
the name of the person selected in the nomination contest

Nomination campaign return

If the contestant's financial agent has accepted contributions of $1,000 or more in total, or incurred nomination campaign expenses of $1,000 or more in total, he or she must give the Chief Electoral Officer:

a nomination campaign return on the financing and nomination campaign expenses for the campaign
an auditor's report on the return, if the amounts of contributions or expenses require the appointment of an auditor
a declaration by the financial agent that the return is complete and accurate
a declaration by the nomination contestant that the return is complete and accurate

These documents are due within four months after the selection date of the candidate. If the selection date of a nomination contest falls within an election period for the electoral district or the 30 days before it, however, the documents are due within four months after election day.

The nomination campaign return must include:

a statement of campaign expenses
a statement of any disputed claims that are the subject of court proceedings
a statement of unpaid claims that are, or may be, the subject of an application to the Chief Electoral Officer or a judge to authorize payment
a statement of contributions received from individuals, corporations, trade unions, and unincorporated organizations or associations
the number of contributors in each group of individuals, corporations, trade unions and associations
the name and address of each association that contributed, the amount of its contribution, the date on which it was received by the nomination contestant, the name and address of each individual whose money forms part of the contribution, the amount of money provided by that individual that is included in the contribution, and the date on which it was provided to the association
the name and address of every other contributor who made contributions of a total amount of more than $200, that total amount, the amount of each contribution, and the date on which it was received by the contestant
for each numbered company that made contributions of a total amount of more than $200, the name of the chief executive officer or president of the company
a statement of the commercial value of goods or services provided and of funds transferred by the nomination contestant to a registered party, a registered association or a candidate
a statement of the commercial value of goods or services provided and of funds transferred to the nomination contestant from himself or herself in his or her capacity as a candidate
a statement of the contributions received but returned to the contributor or otherwise dealt with in accordance with the Act

Several items must accompany the return:

documents evidencing expenses set out in the return, including bank statements, deposit slips and cancelled cheques
any statements and declarations provided to the financial agent by an association that made a contribution coming from money provided by an individual
the contestant's statement of personal expenses

After closing the campaign's bank account, the financial agent must give the Chief Electoral Officer the final statement of the account.

Auditor's report

The contestant's auditor must report to the financial agent on the nomination campaign return as soon as possible after the selection date. In accordance with generally accepted auditing standards, the auditor must make any examination that will enable him or her to give an opinion in the report about whether the return fairly presents the information contained in the financial records on which it is based.

The report must include any statement that the auditor considers necessary if:

the return does not fairly present the information contained in the financial records on which it is based
the auditor has not received from the contestant or the financial agent all the information and explanation that the auditor required, or
based on the examination, it appears that the financial agent has not kept proper accounting records

Disposal of surplus campaign funds

The surplus amount of nomination campaign funds is determined by calculating:

the sum of the contributions accepted by the financial agent on behalf of the contestant and any other amounts received by the contestant for his or her nomination campaign that are not repayable
the sum of the contestant's nomination campaign expenses paid under the Act and any transfers from the contestant to the registered party, the registered association of the party that held the nomination contest, or the official agent of the candidate endorsed by the party in the electoral district in which the nomination contest was held.

If the first sum is larger than the second, the difference between them is the surplus.

The contestant's financial agent must transfer any surplus campaign funds to:

the official agent of the candidate endorsed by the registered party in the electoral district in which the nomination contest was held, or
the registered association that held the nomination contest or the registered party for whose endorsement the contest was held

This transfer must take place either:

within 60 days after receiving a notice of estimated surplus from the Chief Electoral Officer, or
within 60 days after providing the contestant's nomination campaign return to the Chief Electoral Officer if the financial agent has not received a notice of estimated surplus

Public disclosure of information

As soon as possible after receiving them, the Chief Electoral Officer must publish:

the notice of nomination contest
the nomination campaign returns of nomination contestants and any updated versions of them
a list of unpaid claims that are deemed to be contributions
the notice of disposal of surplus campaign funds

Publication may take place in any manner that the Chief Electoral Officer considers appropriate.

Offences and punishment

The Act itemizes numerous specific offences concerning nomination campaigns, ranging from the failure to appoint a financial agent to the failure to provide a nomination campaign return. Other offences include attempting to circumvent or collude in circumventing the rules for ineligible contributors, for concealing a contributor's identity and for contribution limits.

Political Contributions by Corporations and Trade Unions –

New Rules on January 1, 2004

New rules for corporations and trade unions making political contributions came into effect on January 1, 2004. The rules are part of important changes to the Canada Elections Act made by Parliament in June 2003.

This backgrounder summarizes the main changes affecting corporations and trade unions in the amended Canada Elections Act, and is not intended to be a comprehensive outline of the Act's new provisions. Six other backgrounders summarize changes affecting individuals, registered political parties, electoral district associations, leadership contestants, candidates and nomination contestants.

The most significant change affecting corporations and trade unions concerns limits on contributions.

Limits on contributions

A corporation or trade union may contribute:

up to $1,000* in total in any calendar year to the registered associations, nomination contestants and candidates of a particular registered party
up to $1,000* in total to a candidate for a particular election who is not the candidate of a registered party

Contribution limits are adjusted annually for inflation*.

Corporations and trade unions are forbidden from contributing to a registered party or a leadership contestant. If a leadership campaign is already in progress on January 1, 2004, the new rules do not apply to that campaign.

Contributions can be received only by:

the financial agent and authorized electoral district agents of a registered association
the financial agent of a nomination contestant
the official agent of a candidate

Any person authorized to accept contributions must issue a receipt for each contribution over $25.

Special provisions for contributions

A special provision applies if two elections are held in an electoral district in a single calendar year, and a corporation or trade union has already made a contribution to a registered association, nomination contestant or candidate of a registered political party in that electoral district before the first election day. In that case, the corporation or trade union may make further contributions of up to $1,000 in total to the registered association and nomination contestants and candidate of the registered political party in the same electoral district during the election period for the second election.

Providing paid leave of absence

Providing paid leave of absence to a nomination contestant or candidate is permitted and is not considered to be a contribution if it is:

provided by an employer who is eligible to make a contribution
provided during an election period to an employee to allow him or her to be a nomination contestant or candidate

Ineligible corporations and trade unions

Certain corporations and trade unions are not eligible to make a contribution:

a corporation that does not carry on business in Canada
a trade union that does not hold bargaining rights for employees in Canada
a corporation that is wholly and directly owned by the Crown, and its wholly owned subsidiary
a corporation that receives more than 50 percent of its funding from the federal government

Indirect contributions prohibited

A corporation or trade union must not make an indirect contribution. That is, a corporation or trade union cannot give money, property or services to an individual for the purpose of making a political contribution in that individual's name.

Transfers prohibited

A registered association, a candidate or a nomination contestant of a registered party may not transfer to the party any amount received from a corporation or a trade union that made an allowable contribution to the registered associations, nomination contestants and candidates of a particular registered party.

Corporations as agents

A corporation incorporated under the laws of Canada or a province is eligible to be:

the financial agent or an electoral district agent of a registered association
a chief agent or a registered agent of a registered party, or
a chief agent or an agent of an eligible party

Public disclosure of information

After an election, the official agent of a candidate must submit a financial return to the Chief Electoral Officer, as must the financial agent of a nomination contestant if the agent has accepted contributions of $1,000 or more in total, or incurred nomination campaign expenses of $1,000 or more in total. Similarly the financial agent of a registered association must report annually.

Among other detailed information, the financial transactions return of an electoral district association, the nomination campaign return of a nomination contestant and the candidate's electoral campaign return must set out:

the name and address of each corporation and trade union that made monetary and non-monetary contributions of a total amount of more than $200, that total amount, the amount of each contribution, and the date on which it was received
for each numbered company that made monetary and non-monetary contributions of a total amount of more than $200, in addition to the name and address of the company, the name of the chief executive officer or president of the company

For reporting purposes, loans are considered to be contributions.

The returns are public documents. The Canada Elections Act requires the Chief Electoral Officer to publish the financial transactions returns of registered political parties and registered associations of registered political parties, the nomination campaign returns, the leadership campaign returns and the candidate's electoral campaign returns in any manner he or she considers appropriate.

Offences and punishment

The Act itemizes a number of offences, such as circumventing or attempting to circumvent or collude in circumventing the rules for ineligible contributors, for concealing a contributor's identity and for contribution limits.

Registration and Political Financing of Electoral District Associations –

New Rules on January 1, 2004

New rules for electoral district associations came into effect on January 1, 2004. The rules are part of important changes to the Canada Elections Act made by Parliament in June 2003.

This backgrounder summarizes the main changes affecting electoral district associations in the amended Canada Elections Act, and is not intended to be a comprehensive outline of the Act's new provisions. Six other backgrounders summarize changes affecting individuals, corporations and trade unions, registered political parties, leadership contestants, candidates and nomination contestants.

The most significant changes affecting electoral district associations – often known as riding associations or constituency associations – concern registration, contributions, financial reports and public disclosure of information.

Registration of associations

If an electoral district association of a registered political party wants to accept contributions, provide goods and services or transfer funds, it must apply to the Chief Electoral Officer to be registered. Registration allows the association to:

accept contributions
provide goods and services and transfer funds to a candidate endorsed by a registered party
provide goods and services and transfer funds to a registered party or a registered association
accept the surplus electoral funds of a candidate, the surplus leadership campaign funds of a leadership contestant, and the surplus nomination campaign funds of a nomination contestant

An application for registration of an electoral district association of a registered party may be submitted to the Chief Electoral Officer by the association, and must include:

the full name of the association and of the electoral district
the full name of the registered party
the address of the office of the association at which records are maintained and to which communications may be addressed
the names and addresses of the chief executive officer and other officers of the association
the name and address of the appointed auditor of the association
the name and address of the financial agent of the association

The application must be accompanied by:

the signed consent of the financial agent
the signed consent of the auditor
a declaration signed by the leader of the party certifying that the association is an electoral district association of the party

The Chief Electoral Officer must register an electoral district association that meets these requirements. The association is registered as of the date on which the Chief Electoral Officer enters it in the registry of electoral district associations.

A registered party may not have more than one registered association in an electoral district.

Agents and auditor

An electoral district association must appoint one financial agent and one auditor. The financial agent is responsible for administering the association's financial transactions and for reporting on them. If the association has accepted contributions or incurred expenses of $5,000 or more in a fiscal year, its auditor must prepare an audit report on the association's financial transactions return.

A registered association may also appoint electoral district agents, who are authorized to accept contributions and to incur and pay expenses on behalf of the association. Within 30 days of an agent's appointment, the association must give the Chief Electoral Officer a report listing the name and address of the agent, any terms and conditions of the appointment, and a certification by the financial agent. The financial agent is considered to be an electoral district agent.

The Act gives details on who are eligible and ineligible to serve as agents and auditors.

Limits on contributions

Any individual who is a Canadian citizen or permanent resident of Canada may contribute up to $5,000* in total in a calendar year to a particular registered political party and its registered electoral district associations, nomination contestants and candidates.

Contribution limits are adjusted annually for inflation*.

Limits on contributions by corporations and trade unions

A corporation or trade union may contribute up to $1,000* in total in any calendar year to the registered associations, nomination contestants and candidates of a particular registered party.

Certain corporations and trade unions are not eligible to make a contribution:

a corporation that does not carry on business in Canada
a trade union that does not hold bargaining rights for employees in Canada
a corporation that is wholly and directly owned by the Crown, and its wholly owned subsidiary, or
a corporation that receives more than 50 percent of its funding from the federal government

A special provision applies if two elections are held in an electoral district in a single calendar year, and a corporation or trade union has already made a contribution to a registered association in that electoral district before the first election day. In that case, the corporation or trade union may make further contributions of up to $1,000* to the registered association in the same electoral district during the election period for the second election.

Unlimited contributions

There is no limit to a contribution made in an individual's will as an unconditional, non-discretionary contribution ("testamentary disposition").

Indirect contributions

A registered electoral district association must not normally receive an indirect contribution – one that comes from the money, property or services of another person or entity (including companies, unions and associations), if that other person or entity gave it to the contributor to make a contribution to the association.

Nevertheless under certain circumstances, an unincorporated organization or association is allowed to make contributions to a registered association that come from money provided by an individual who is a Canadian citizen or permanent resident of Canada. The contributions must not exceed $1,000* in total in any calendar year to the registered association. With each contribution the unincorporated association must also provide a statement containing the following information:

the name and address of the individual who is responsible for the association
the amount of the contribution
the name and address of each individual whose money forms part of the contribution, the amount of money provided by that individual included in the contribution, and the date on which it was provided

A special provision applies if two elections are held in an electoral district in a single calendar year, and an unincorporated association has already made an indirect contribution to a registered association in that electoral district before the first election day. In that case, the association may make further contributions of up to $1,000* to the registered association in the same electoral district during the election period for the second election.

Transferring funds

A transfer of funds is allowed and is not considered to be a contribution if it is from a registered association to the party with which it is affiliated, another registered association of the party or a candidate endorsed by the party.

Providing goods and services

Providing goods or services is permitted and is not considered to be a contribution if it is from a registered association to the party with which it is affiliated, another registered association of the party or a candidate endorsed by the party.

An electoral district association of a registered party may provide goods or services to a leadership or nomination contestant only if it offers the goods or services equally to all contestants.

Receipts

Any person authorized to accept contributions to a registered electoral district association must issue a receipt for each contribution over $25.

If the organizers of a registered association's meeting or fundraising event collect anonymous contributions of $25 or less per person, the person authorized to accept those contributions must record a description of the function and its date, the approximate number of people present, and the total amount of anonymous contributions accepted.

Income tax credit

When Parliament changed the Canada Elections Act, it also changed the Income Tax Act to allow higher income tax credits for political contributions by an individual:

for contributions up to $400, a credit of 75 percent (for example, a $300 credit for a contribution of $400)
for contributions from $401 to $750, a credit of $300 plus 50 percent of the amount over $400 (for example, a $475 credit for a contribution of $750)
for contributions over $750, the lesser of $650 or $475 plus 33⅓ percent of the amount over $750 (for example, a $650 credit for a contribution of $1,275)

Election advertising expenses

During an election period, a registered association must not incur expenses for election advertising. Election advertising means the transmission to the public by any means during an election period of an advertising message that promotes or opposes a registered party or the election of a candidate, including one that takes a position on an issue with which a registered party or candidate is associated.

Association's reports and statements

In addition to the information required in the application for registration, a registered association must provide the Chief Electoral Officer with:

within six months after becoming a registered association, a statement of assets and liabilities, including any surplus or deficit, as of the day before the effective date of the registration, and a declaration by the financial agent that the statement is complete and accurate
within 30 days after a change in any information in the application for registration (except for a change in the name of the registered party), a report of the change, certified by the chief executive officer of the association; if the change involves the replacement of the auditor or financial agent, the report must include the signed consent of the new appointee
on or before May 31 of every year (or July 31 if an election campaign is in progress in the electoral district on May 31), a statement certified by the chief executive officer confirming the validity of the information about the association in the registry of electoral district associations, or if there has been a change in the information, the report of the change
within five months after the end of the association's fiscal period, the financial agent's financial transactions return and associated documents

Financial transactions return

The fiscal period of a registered association is the calendar year. Within five months after the end of each fiscal year, the financial agent of a registered association must give the Chief Electoral Officer:

a financial transactions return
the auditor's report on the financial transactions return, if one is required because the association has accepted contributions or incurred expenses of $5,000 or more in the fiscal year
a declaration by the financial agent that the financial transactions return is complete and accurate
any statements and declarations given to the financial agent concerning allowable indirect contributions from an association

The financial transactions return must set out:

a statement of contributions (including loans) received by the registered association from individuals, corporations, trade unions and associations (that is, unincorporated organizations and all their divisions)
the number of contributors in each group of individuals, corporations, trade unions and associations
the name and address of each association that made an indirect contribution, the amount of its contribution, the date on which it was received by the registered association, the name and address of each individual whose money forms part of the contribution, the amount of money provided by that individual that is included in the contribution, and the date on which it was provided to the association
the name and address of each other individual, corporation, trade union and association that made contributions of a total amount of more than $200, that total amount, the amount of each contribution, and the date on which it was received by the association
for each corporation that is a numbered company and that made contributions of a total amount of more than $200, the name of the chief executive officer or president of the company
a statement of the association's assets and liabilities and any surplus or deficit in accordance with generally accepted accounting principles, including a statement of disputed claims and unpaid claims that are, or may be, the subject of an application to the Chief Electoral Officer or a judge
a statement of the registered association's revenues and expenses in accordance with generally accepted accounting principles
a statement of the commercial value of goods or services provided and of funds transferred by the registered association to the registered party, to another registered association or to a candidate endorsed by the registered party
a statement of the commercial value of goods or services provided and of funds transferred to the registered association from the registered party, another registered association, a candidate, a leadership contestant or a nomination contestant
a statement of loans or security received by the registered association, including any conditions on them
a statement that provides full disclosure of financial loans for a campaign, including interest rates, repayment schedules and the name of the lender
a statement of contributions (excluding loans) received by the registered association but returned in whole or in part to the contributors or otherwise dealt with in accordance with the Act

Auditor's report and payment

If the registered association accepted contributions or incurred expenses of $5,000 or more, the association auditor must report to the financial agent on the financial transactions return. In accordance with generally accepted auditing standards, the auditor must make any examination that will enable him or her to give an opinion in the report about whether the return fairly presents the information contained in the financial records on which it is based.

The report must include any statement that the auditor considers necessary if:

the financial transactions return does not fairly present the information contained in the financial records on which it is based, or
based on the examination, it appears that the association has not kept proper accounting records

When the Chief Electoral Officer receives the financial transactions return, its associated documents and the auditor's invoice for the expenses incurred for the audit, he or she must give the Receiver General a certificate that sets out the amount to be paid the auditor from public funds, up to a maximum of $1,500. The Receiver General then pays the auditor.

Deregistration

The Chief Electoral Officer may deregister a registered association:

for failing to provide required documents or to file a financial transactions return
if the association applies to be deregistered, or
if the registered party applies to have the association deregistered

The Act stipulates the various procedures for involuntary and voluntary deregistration. If a registered party applies voluntarily to be deregistered, its registered associations will also be deregistered; similarly if the Chief Electoral Officer deregisters a party, its registered associations will be deregistered.

If the boundaries of an electoral district are revised as a result of a representation order under the Electoral Boundaries Readjustment Act, a registered association for the electoral district may file a notice with the Chief Electoral Officer supported by the leader of the registered party that it will continue as the registered association. The notice must be filed before the order comes into force. If the association does not give notice, it is deregistered when the representation order comes into force.

Public disclosure of information

The Chief Electoral Officer must publish:

as soon as possible after receiving them, the returns on financial transactions of registered associations, and any updated versions of them
18 months after the end of the fiscal period, the list of unpaid claims that are deemed to be contributions

Publication may take place in any manner that the Chief Electoral Officer considers appropriate.

All reports and formal statements concerning registered associations are public records, and anyone may inspect them or get copies of them on request. In addition to the information published by the Chief Electoral Officer, they include all instructions, decisions and rulings by the Chief Electoral Officer on points about registered associations arising under the Act.

Offences and punishment

The Act itemizes numerous offences concerning registered associations, from failing to provide required information to making a prohibited transfer. Other offences include attempting to circumvent or collude in circumventing the rules for ineligible contributors, for concealing a contributor's identity and for contribution limits.

Contributions and Expenses at a Federal Election or By-election:

Candidates and Registered Parties

The Canada Elections Act includes financial provisions designed to ensure openness, fairness and accessibility in our electoral system.

Contributions

Candidates and registered political parties may accept contributions from individuals who are Canadian citizens or permanent residents of Canada. Contributions from foreign sources are prohibited.

In addition, candidates may accept contributions from:

a corporation that carries on business in Canada, other than a Crown corporation or a corporation that receives more than 50% of its funding from the federal government
a union that holds bargaining rights for employees in Canada
an "unincorporated association" that raises money from eligible individual contributors for the purpose of making a contribution

The source of each contribution and the name and address of each contributor of more than $200 to a registered political party in a single year or to a candidate during an election must be disclosed by the party's chief agent or the candidate's official agent. When a numbered corporation makes a donation over $200 to a candidate, the official agent must disclose the name of its chief executive officer or president. Names and addresses of all contributors who contribute through unincorporated associations must be disclosed as well as names and addresses of contributors who make contributions to a leadership contestant through a registered party.

Limits on contributions by individuals

Any individual who is a Canadian citizen or permanent resident of Canada may make these contributions:

up to $5,000* in total in a calendar year to each particular registered political party and its registered electoral district associations, nomination contestants and candidates
up to $5,100* in total per election to each candidate for a particular election who is not the candidate of a registered political party
up to $5,100* in total to the leadership contestants in a particular leadership contest

Contribution limits are adjusted annually for inflation*.

A candidate or nomination contestant may also contribute an additional $5,000* out of his or her own funds to his or her own election or nomination campaign.

Limits on contributions by corporations and trade unions

A corporation or trade union may contribute:

up to $1,000* in total in any calendar year to the registered associations, nomination contestants and candidates of each particular registered party
up to $1,000* in total per election to each candidate for a particular election who is not the candidate of a registered party

Contribution limits are adjusted annually for inflation*.

Certain corporations and trade unions are not eligible to make a contribution:

a corporation that does not carry on business in Canada
a trade union that does not hold bargaining rights for employees in Canada
a Crown corporation, or
a corporation that receives more than 50% of its funding from the federal government

A special provision applies if two elections are held in an electoral district in a single calendar year, and a corporation or trade union has already made a contribution to the nomination contestants, the registered electoral district association or the candidate of a registered party in that electoral district before the first election day. In that case, the corporation or trade union may make further contributions of up to $1,000* in total to the candidate, the nomination contestants or the registered electoral district association of the registered party in the same electoral district during the election period for the second election. Those contributions to the candidate, the nomination contestants or the registered association of a particular registered party are allowed in only one electoral district in any calendar year.

Another special provision concerns a contribution to an unsuccessful nomination contestant. A corporation or trade union may have made a contribution to a nomination contestant in an electoral district, but the contestant was not endorsed by the registered party as its candidate. In that case, during the same year the corporation or trade union may make contributions not exceeding $1,000* in total to the endorsed candidate after he or she is endorsed. Those contributions to the candidate of a registered party are allowed only for one election in one electoral district in any calendar year.

Indirect contributions

A candidate must not normally receive an indirect contribution – one that comes from the money, property or services of another person or entity (including companies, unions and organizations), if that other person or entity gave it to the contributor to make a contribution to the candidate.

Nevertheless under certain circumstances, an unincorporated association is allowed to make contributions to a candidate that come from money provided by an individual who is a Canadian citizen or permanent resident of Canada and given to the association for the purpose of making a political contribution. The contributions must not exceed:

$1,000* in total in any calendar year to the registered associations, the nomination contestants and the candidates of each particular registered party
$1,000* in total per election to each candidate for a particular election who is not the candidate of a registered party

Contribution limits are adjusted annually for inflation*.

With each contribution, the organization must also provide a statement containing the following information:

the name and address of the individual who is responsible for the organization
the amount of the contribution
the name and address of each individual whose money forms part of the contribution, the amount of money provided by that individual included in the contribution, and the date on which it was provided

A special provision applies if two elections are held in an electoral district in a single calendar year, and an unincorporated association has already made an indirect contribution to the nomination contestants, the registered electoral district association or the candidate of a registered party in that electoral district before the first election day. In that case, the organization may make further contributions of up to $1,000* in total to the nomination contestants, the registered electoral district association or the candidate of the registered party in the same electoral district during the election period for the second election. Those contributions to the nomination contestants, the registered electoral district association or the candidate of a particular registered party are allowed only in one electoral district in any calendar year.

Another special provision concerns a contribution to an unsuccessful nomination contestant. An unincorporated association may have made a contribution to a nomination contestant in an electoral district, but the contestant is not endorsed by the registered party as its candidate. In that case, during the same year the unincorporated organization may make contributions not exceeding $1,000* in total to the endorsed candidate after he or she is endorsed. Those contributions to the candidate of a registered party are allowed only for one election in one electoral district in any calendar year.

Prohibited contributions

It is illegal for anyone (including a company or other organization) to solicit or accept a contribution on behalf of a registered party, registered association or candidate if the person or entity made a representation to the contributor or potential contributor that any part of the contribution would be transferred to a person or entity other than the registered party, a candidate, leadership contestant or electoral district association. It is also illegal for anyone to collude with someone else (including a company or other organization) to circumvent this prohibition.

Election expenses

Only persons authorized by the Act may incur election expenses. Candidates and registered parties are subject to indexed election expenses limits based on the higher of:

the number of electors registered on the preliminary lists of electors in the applicable ridings, or
the number of electors registered on the revised lists of electors in the applicable ridings

For candidates only, this limit is adjusted in certain circumstances:

In a general election, if the number of electors on the preliminary or revised lists of electors in any riding is less than the average number on all preliminary or revised lists of electors in that general election, then the number of electors used for the calculation of the limit is deemed to be halfway between the number on the lists in that riding and the average number on all preliminary or revised lists of electors, as the case may be.
In a by-election, if the number of electors on the preliminary or revised lists in the riding is less than the average number on all revised lists of electors in the preceding general election, then the number of electors used for the calculation of the limit is deemed to be halfway between the number on the lists in the riding and that average number.
If the number of electors per square kilometer is less than 10, based on the preliminary or revised lists of electors in a riding, the dollar amount per elector is increased according to a formula set out in the Act.
If a candidate endorsed by a registered political party dies between 2:00 p.m. on the fifth day before nominations close and election day, the election is postponed; at the postponed election all candidates are entitled to 150% of the normal base election expenses limit.

Registered political parties and candidates must not exceed the election expenses limits calculated by the Chief Electoral Officer under the formulas provided in the Act.

Reimbursements

If a candidate is elected or receives at least 10% of the valid votes cast in his or her riding at an election, the Chief Electoral Officer will authorize the Receiver General to send the candidate's official agent, or a person designated by him or her, a reimbursement of 15% of the expenses limit for that riding shortly after the return of the writs. If the candidate also complies with all the post-election requirements of the Act, he or she will qualify for a second installment representing a reimbursement of 60% of actual election and personal expenses paid, minus the amount already received. The total reimbursement may not exceed 60% of the election expenses limit for the riding.

All candidates are entitled to full refunds of their $1,000 deposits, provided they comply certain deadlines.

Registered political parties that obtain at least 2% of the total valid votes cast in a general election, or 5% of the valid votes cast in the ridings where they have endorsed candidates, are entitled to a reimbursement of 50% of their actual election expenses paid. For the first general election held after January 1, 2004, the reimbursement amount is 60%.

Election advertising restrictions

Section 323 of the Canada Elections Act does not permit individuals to knowingly transmit election advertising to the public on election day.

Participation in the electoral process

Voting is not the only way to take part in the electoral process. Political parties and candidates can accept volunteer work as well as goods or services and financial contributions.

Volunteer work means any service provided free of charge by a person outside of that person's working hours. Volunteer work is not considered a contribution and is not subject to the eligibility rules respecting contributions or contribution caps. It does not include a service provided by a person who is self-employed, if the service is one that is normally sold or otherwise charged for by that person; in this case, the services provided are considered contributions and are subject to the rules respecting contributions, including the requirement to be disclosed.

Income tax credits

Although contributions may be made in the form of money, goods or services, only a monetary contribution qualifies for an income tax credit. The Income Tax Act provides the following tax credits for eligible contributions to candidates and registered political parties in any one calendar year:

Contribution amount	Corresponding tax credit

$0.01 to $400.00	75% of the contribution
$400.01 to $750.00	$300 plus 50% of the contribution over $400
$750.01 to $1,275.00	$475 plus 33.3% of the contribution over $750
$1,275.01 or more	maximum credit of $650

To obtain an income tax credit, a contributor must obtain an official receipt and submit it when filing his or her tax return. Only the official agent of a confirmed candidate or a registered agent of a registered political party can issue official receipts for eligible contributions.

Public disclosure

Through their official agents, candidates must submit an audited electoral campaign return to the Chief Electoral Officer within four months of election day. Among other information, the candidate's return must show all electoral campaign expenses incurred, the amounts and sources of all contributions, and the names, addresses and dates the contributions were provided of all those whose aggregate contributions exceeded $200. The names and addresses of all contributors who contributed through an unincorporated association must be disclosed.

Following a general election, every registered political party is required to submit an audited return of its election expenses to the Chief Electoral Officer within six months of election day. Registered parties are also required to submit an annual fiscal period return, disclosing (among other information) any by-election expenses, the expenditures of the party during the fiscal period, the amount and source of all contributions, and the names, addresses and dates the contributions were provided of those whose aggregate contributions exceeded $200. This return must be submitted to the Chief Electoral Officer within six months after the end of the fiscal period to which the return relates.

The Chief Electoral Officer publishes a summary of each candidate's return in whatever media he or she deems appropriate. Returning officers keep all candidates' returns for six months, so that anyone who wishes to consult them or to obtain extracts may do so. After that initial period, the returns may be examined at Elections Canada in Ottawa.

The Chief Electoral Officer also publishes the financial returns of registered political parties and candidates in whatever form and media he or she deems appropriate.

The Elections Canada Web site includes a searchable database of:

the contributions received and the election expenses incurred by candidates for all elections since the general election of June 1997
the election expenses incurred by registered political parties at the last general election and their receipts and expenses by fiscal period from 1993 on.

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