Political Financing Handbook for Electoral District Associations and Financial Agents (EC 20089) – August 2021
This chapter defines what is and is not a contribution, explains the rules for administering contributions and provides practical examples. It covers the following topics:
- What is a contribution?
- What is commercial value?
- Who can contribute to whom and how much?
- Are volunteer labour, sponsorship or advertising contributions?
- What are the rules for contribution receipts, anonymous contributions and ineligible contributions?
What is a contribution?
A contribution is donated money (monetary contribution) or donated property or services (non-monetary contribution).
|Monetary contribution||Non-monetary contribution|
A monetary contribution is an amount of money provided that is not repayable.
Monetary contributions include cash, cheques or money orders, credit card or debit card payments, and online payments (other than contributions of cryptocurrency).
The amount of a non-monetary contribution is the commercial value of a service (other than volunteer labour) or of property, or the use of property or money, to the extent that it is provided without charge or at less than commercial value. This includes contributions of cryptocurrency and forgone interest on loans.
What is commercial value?
Non-monetary contributions are recorded at commercial value. Commercial value, in relation to property or a service, is the lowest amount charged at the time that it was provided for the same kind and quantity of property or service, or for the same use of property or money, by:
- the person who provided the property or service (if the person who provided it is in that business), or
- another person who provides that property or service on a commercial basis in the area (if the person who provided the property or service is not in that business)
Note: If the commercial value of a non-monetary contribution is $200 or less, and it is from an individual not in that business, the contribution amount is deemed to be nil.
- David, who is not in the business of renting office supplies, lends the association a projector and screen for a week. The financial agent has to determine the commercial value of this non-monetary contribution by checking with local suppliers to see how much they would charge for renting similar equipment for the same period. If that amount is greater than $200, a non-monetary contribution must be reported. If it is $200 or less, the contribution is deemed nil and does not have to be reported.
- Paula, a self-employed web designer, offers to design the registered association's website and does not charge for the service. This is a non-monetary contribution from Paula. The commercial value is equal to the lowest amount she normally charges for the same kind of service of similar scope.
Who can contribute?
Only individuals who are Canadian citizens or permanent residents of Canada can make a contribution to a registered party, a registered association, a candidate, a leadership contestant or a nomination contestant.
Contributions can be accepted from minors, but political entities should consider whether the person is contributing willingly and using their own property or money.
Note: Corporations, trade unions, associations and groups cannot make contributions.
Limits on contributions, loans and loan guarantees to a registered association
This table displays the limits for registered associations. The limits for all entities are available in Chapter 1, Reference Tables and Timelines.
|Political entity||2021 annual limit|
|In total to all the registered associations, nomination contestants and candidates of each registered party||$1,650*|
- The contribution limits apply to total contributions, the unpaid balance of loans made during the contribution period, and the amount of any loan guarantees made during the contribution period that an individual is still liable for.
- The sum of these three amounts cannot at any time exceed the contribution limit.
There are some exceptions to the limits on contributions:
- A nomination contestant is permitted to give an additional $1,000 in total per contest in contributions, loans and loan guarantees to their own campaign.
- A candidate is permitted to give a total of $5,000 in contributions, loans and loan guarantees to their campaign. A candidate is also permitted to give an additional $1,650* in total per year in contributions, loans and loan guarantees to other candidates, registered associations and nomination contestants of each party. (This includes contributions to the registered association in the candidate's electoral district and contributions to the candidate's own nomination campaign.)
*The limits increase by $25 on January 1 in each subsequent year.
- Max decides to contribute $1,650 to the registered party he supports. In addition, he makes a $650 contribution to the party's registered association in his riding. When a federal election is called in the same year, he makes a $1,000 contribution to the candidate representing the party in his riding. With that, Max reaches the annual limit for contributions to the registered party as well as the annual limit for contributions to any combination of candidates, registered associations and nomination contestants of the registered party. He could still make a contribution to political entities of other registered parties.
- Indra makes a $1,000 monetary contribution to a registered association in March. The next month, she makes a non-monetary contribution with a commercial value of $650 to the same association. Indra has now reached the annual limit for contributions to any combination of candidates, registered associations and nomination contestants of that registered party.
- Clara made a $1,650 contribution in her riding to the registered association of the party she supports. Later that year an election is called and Clara makes a $1,650 contribution to the candidate representing the party in her riding. The official agent of the candidate, however, is aware of the contribution made to the association and returns the cheque to Clara, because with the earlier contribution she has reached her annual limit.
Note: It is important that financial agents of electoral district associations and nomination contestants, and official agents of candidates, communicate about contributions, loans and loan guarantees because the yearly contribution limit applies to the total amount of these.
- Peter gave a $1,650 loan to a candidate in his riding early in the year. The full amount is still outstanding on December 31. Consequently, Peter could not have made another loan, contribution or loan guarantee that year to a candidate, registered association or nomination contestant of the same party. The sum of contributions, loans and loan guarantees cannot at any time exceed the contribution limit.
Note: These examples use the limits in effect for 2021.
Volunteer labour is not a contribution
What is volunteer labour?
Volunteer labour is any service provided free of charge by a person outside of their working hours, excluding a service provided by a self-employed person who normally charges for that service.
Volunteer labour is not a contribution.
Who is eligible to volunteer?
Any person can volunteer for a political entity, even if they are not a Canadian citizen or permanent resident.
But a self-employed person cannot volunteer a service they would normally charge for. That is a non-monetary contribution and not volunteer labour. The person would have to be an eligible contributor under the contribution rules and stay within their contribution limit.
People who work on-call or variable hours can volunteer for a political entity, as long as they are not self-employed in the field and their employer has not instructed them to work for the political entity while receiving standby pay or other compensation.
Volunteer labour cannot be provided by corporations, trade unions, associations or groups, though individual employees or members can independently choose to volunteer.
Note: To know whether a person is an employee or self-employed, ask if they receive a salary or wages, payroll deductions and a T4 slip from their employer or corporation at tax time. If they do, the person is an employee for the purpose of the Canada Elections Act and can volunteer in the same capacity as their line of business, outside their working hours.
- Nana, who is employed as a teacher, offers to work in the evenings in the registered association's office to answer the phone and help with general office duties. This is volunteer labour and is therefore not a contribution.
- Alex, a self-employed graphic designer offers to design a pamphlet for the registered association free of charge. Because Alex is self-employed and normally charges for that service, the pamphlet design is not volunteer labour. The commercial value of the service has to be recorded as a non-monetary contribution. In this case, the commercial value is the lowest amount Alex normally charges for that service.
Paying volunteers for part of their work
Volunteers can be paid for part of their work, but the paid work is not volunteer labour. An agreement must be in place before the work is performed. It can specify incentive- or performance-based terms of remuneration rather than a fixed rate.
- Suzanne is being paid to manage the association's social media accounts. Suzanne has signed an agreement that lists the tasks she will perform and her hourly wage. Often, when she has finished her paid work, Suzanne volunteers for the association. This is an acceptable combination of paid and volunteer work. The expenses incurred under the agreement are expenses that have to be reported. The volunteer labour is not reported.
- Sam works full-time as an administrative officer on the staff of a member of Parliament. He volunteers to help organize the associationís annual fundraising dinner. Since some of the work will take place during Samís regular working hours, he takes unpaid leave (or paid, if the leave was earned under regular terms of employment that do not specify leave for the purpose of helping a political entity). The association offers Sam a fixed amount of $200 for the hours he will work during what would be his regular working hours. The financial agent puts this agreement in writing, and the amount is reported as an expense of the association.
For a detailed discussion of this topic, please refer to Elections Canada's interpretation note 2019-01, Volunteer Labour, on the Elections Canada website.
Sponsorship or advertising at a political event is a contribution
A transaction involving the receipt of money by a political entity in exchange for advertising or promotional opportunities directed at members or supporters of the political entity is not recognized as a commercial transaction. Any money received as part of such an arrangement is to be treated as a contribution that is subject to the contribution limit and eligibility rules.
The registered association holds a golf tournament as a fundraiser. The association encourages individuals to sponsor a hole: for $200, they can have their names printed on a small sign attached to the flag pole. The full amount paid by each individual is a contribution to the association. The association does not ask corporations or unions to sponsor a hole because only individuals can make contributions.
Accepting and recording contributions
Only the financial agent and authorized electoral district agents can accept contributions to the registered association.
|Contribution||What to do|
|Anonymous contributions||Anonymous contributions of $20 or less can be accepted.|
|Contributions over $20 and up to $200||The contributor's full first and last names have to be recorded (initials are not acceptable), and a contribution receipt must be issued. To issue a tax receipt, the agent has to record the contributor's home address as well.|
|Contributions over $200||The contributor's full first and last names (initials are not acceptable) and home address have to be recorded, and a contribution receipt must be issued.|
Note: When total contributions from an individual are over $200, their name, partial address and contribution amounts disclosed in the financial return will be published on the Elections Canada website.
This table summarizes some important points about accepting contributions and issuing receipts.
|Contribution received||What to keep in mind|
|Cheque from a joint bank account||
Through an online payment service
From a partnership
From an unincorporated sole proprietor
Note: It is recommended that registered associations only accept contributions made by way of a traceable instrument.
Use of the registered association's online contribution system
The candidate's campaign might use the registered association's website to process online contributions, since associations often already have the necessary resources in place.
If a contribution is processed through the registered association's website to the association's bank account, the contribution is made to the registered association. The association issues the receipt and transfers the contribution amount to the candidate's campaign.
Keep in mind that the registered association's website is an election expense of the candidate if it is used for the campaign during the election period. See Registered association's existing website or web content in Chapter 8, Working with Other Entities During the Election Period, for more information.
Accepting contributions of cryptocurrency
A contribution of cryptocurrency is non-monetary and not eligible for a tax receipt.
The contribution amount is the commercial value of the cryptocurrency at the time that it was received. There are two ways to determine the commercial value:
- If the transfer passed through a payment processor (such as BitPay) that provided an exchange rate, use that rate.
- If the transfer did not go through a payment processor or no exchange rate was provided, use a reasonable rate on a major exchange platform (such as Coinbase) at the time closest to when the transfer was sent. The valuation must be readily ascertainable and verifiable.
A transaction in cryptocurrency will almost always involve a processing fee. The full amount sent by the individual is a contribution to the political entity, and the processing fee is an expense.
Political entities should set up a two-step process to identify contributors of over $20 and record transaction information from the blockchain so that contributions can be audited.
For contributions up to $200, if the contributor is not in the business of selling cryptocurrencies, the contribution amount is deemed nil. But the contributor must still be eligible under the contribution rules. Over $20, the association must keep a record of the contributor's name.
In all instances, associations should be mindful of the rules in the Canada Elections Act against circumventing contribution rules and watch for unusual amounts or patterns in contributions that they receive.
For a detailed discussion of this topic, please refer to Elections Canada's interpretation note 2019-12, Cryptocurrencies, on the Elections Canada website.
Issuing contribution receipts
A receipt has to be issued for each monetary contribution over $20 or non-monetary contribution over $20 that is not deemed nil.
Only the financial agent or authorized electoral district agents can provide official receipts for contributions, including tax receipts. Tax receipts can be issued only for monetary contributions.
Note: The registered association must obtain written authorization from the leader of the registered party before issuing tax receipts.
It is recommended that the financial agent use Elections Canada's Electronic Financial Return (EFR) software to issue all receipts. EFR is free and can be accessed from the Elections Canada website.
Clara contributed $500 to the registered association of the party she supports. Later in the same year when an election was called, Clara contributed $300 to Peter, a candidate in her riding. Clara will receive a receipt for $500 from the registered association and a receipt for $300 from Peter's campaign.
Determining the date a contribution is made
As most contribution limits apply per calendar year, the date a contribution is made is important. It is also important for reporting purposes because this same date will be used as the "date received" in the association's return.
The date a contribution is made is generally the date the contribution is in the hands of the financial agent. There are exceptions for contributions made by regular mail, by post-dated cheque and electronically.
|How contribution is made||Date contribution is made|
|In person||The date the contribution is in the hands of the financial agent or an authorized electoral district agent.|
|By regular mail||The date of the postmark on the envelope. If the postmark is not legible, the contribution is made on the date the agent receives the mail. The association should keep the stamped envelope as part of its records.|
by any means
|The date on the cheque.|
|Electronically (e-transfer, credit card, PayPal, etc.)||The date the contributor initiates the transaction. If the transaction is post-dated, the contribution is made on the date specified by the contributor.|
- On December 23, 2020, Lucy goes to the registered associationís office and gives a cheque in the amount of $300, dated for the previous day. The financial agent deposits the cheque on January 10, 2021. The contribution is made on December 23, 2020. The financial agent issues a receipt for 2020, and the amount counts toward Lucyís 2020 contribution limit.
- Hassim makes an e-transfer to the registered association on December 23, 2020, but the financial agent does not process the amount until January 10, 2021. The contribution is made on December 23, 2020. The financial agent issues a receipt for 2020, and the amount counts toward Hassimís 2020 contribution limit.
- The financial agent receives a cheque from Janelle in the mail on January 5, 2021. The cheque is dated December 28, 2020, and the postmark on the envelope is December 30, 2020. The contribution is made on December 30, 2020. The financial agent issues a receipt for 2020, and the amount counts toward Janelleís 2020 contribution limit.
- The financial agent receives a cheque from Andrew and deposits it in the registered association's bank account. A few days later, when checking the account online, the financial agent notices that the bank has charged the account a fee because the cheque did not have sufficient funds. No contribution has been made and the bank charge is an expense. If Andrew issues a new cheque later, the contribution is made on the date associated with the new contribution.
Recording anonymous contributions
If anonymous contributions of $20 or less are collected during an event related to the association, the financial agent or an authorized electoral district agent has to record:
- a description of the function at which the contributions were collected
- the date of the function
- the approximate number of people at the function
- the total amount of anonymous contributions accepted
Anonymous contributions of $20 or less may also be received outside the context of a particular function. In that case, the financial agent or an electoral district agent has to keep track of the total amount collected plus the number of contributors.
Volunteers of the registered association organize a wine and cheese event one evening and invite local residents. Approximately 40 people show up. During the evening, one of the organizers passes a basket around to collect cash contributions from the attendees. She informs the guests about the contribution rules: a maximum of $20 can be accepted from any one individual as an anonymous cash contribution. At the end of the evening there is $326 in the basket.
The organizer remits the contributions to the financial agent after the event, along with the following details: a description and the date of the event, the approximate number of people who attended (40), and the amount collected in anonymous contributions ($326). The financial agent records the event details, deposits the amount into the associationís bank account and reports the contributions in the annual return.
Remitting anonymous contributions that cannot be accepted
If the financial agent or an authorized electoral district agent receives a contribution that is:
- over $20 and the name of the contributor is not known, or
- over $200 and the name and address of the contributor are not known
the financial agent has to send a cheque for the ineligible amount (that is, the amount over $20 or $200) without delay to Elections Canada, payable to the Receiver General for Canada.
The financial agent and the electoral district agents are responsible for ensuring that contributions are in accordance with the rules set out in the Canada Elections Act.
The following contributions are ineligible:
- cash contributions over $20
- contributions from corporations, trade unions, associations and groups
- contributions that exceed the limit
- indirect contributions (no individual can make a contribution that comes from the money, property or services of another person or entity)
- contributions from a person who is not a Canadian citizen or a permanent resident
- contributions an individual makes as part of an agreement to sell goods or services, directly or indirectly, to a registered party or a candidate (for example, an association cannot agree to buy the candidate's signs from a local dealer in exchange for a contribution)
Returning ineligible or non-compliant contributions
The financial agent or authorized electoral district agent must not accept a contribution that exceeds the limit and should not accept any other type of ineligible contribution.
The financial agent has to return or remit a contribution within 30 days of becoming aware that:
- it is ineligible, or
- It was received as part of a regulated fundraising event for which the publication or reporting requirements were not complied with
An ineligible or non-compliant contribution must be returned to the contributor or remitted to Elections Canada, based on whether or not it was used.
A monetary contribution is considered used if the association's bank account balance fell below the ineligible amount at any time after the contribution was deposited into the bank account.
Flowchart 1 explains how to administer ineligible or non-compliant contributions in different scenarios.
- The financial agent of a registered association deposits a cheque for $675 from a contributor. When he enters the contribution in the books, he notices that the same person has already contributed $1,000 in that year. Within 30 days, assuming the money has not been spent, the financial agent has to issue a cheque for the excess amount, $25, and send it to the contributor. He records a returned contribution of $25.
- The financial agent receives a cheque for $2,000 from a contributor. As this is obviously an over-contribution, the financial agent cannot deposit the cheque. She sends it back to the contributor uncashed, and no reporting is required.
- An individual makes a non-monetary contribution to the association by offering the use of office equipment for a week. The financial agent later realizes that the commercial value of renting the same office equipment is $1,700, which is higher than the contribution limit. The equipment was used, so he sends a cheque for the excess amount of $50 to Elections Canada, payable to the Receiver General for Canada. He records a contribution of $1,700, a returned contribution of $50 and an expense of $1,700.
- The financial agent receives a notice from Elections Canada a couple of months after the reporting deadline. It states that a person who contributed $900 to both the registered association and the candidate exceeded the annual limit by $150 with the contribution to the association. Since the deposit date of the contribution, the registered associationís bank account balance had fallen below the ineligible amount of $150 and the funds were therefore used. The financial agent must remit $150 within 30 days of becoming aware of the contravention. To obtain funds, she could organize a fundraising event, request a transfer from the registered party, or request that the registered party repay the $150 on the registered associationís behalf. Once the money is available, the financial agent sends a cheque for the excess amount to Elections Canada, payable to the Receiver General for Canada. She records a returned contribution of $150.
Note: These examples use the limits in effect for 2021.
Flowchart 1: Returning ineligible or non-compliant contributions
*A monetary contribution was used if the association's bank account balance fell below the ineligible amount at any time after the contribution was deposited into the bank account.
**For example, the contributor's address is known and there are no obstacles to prevent the return.