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 instalment 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 instalment
after the official agent gives the Chief Electoral Officer the candidate's electoral
campaign return and associated documents. That instalment 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.
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.
For more information, please contact:
Elections Canada
257 Slater Street
Ottawa, Ontario
K1A 0M6
Telephone
1 800 463-6868
toll-free in Canada and the United States
001 800 514-6868
toll-free in Mexico
(613) 993-2975
from anywhere in the world
For people who are deaf or hard of hearing:
TTY 1 800 361-8935
toll-free in Canada and the United States
Fax
(613) 954-8584
1 888 524-1444
toll-free in Canada and the United States
This publication is available in alternative formats.
June 2004
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