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Political Financing Handbook for Third Parties, Financial Agents and Auditors – June 2021

To be used for non-fixed-date general elections and by-elections

4. Financial Administration: Overview of Expenses

This chapter introduces the concept of regulated expenses and explains the limits for regulated activities. Other chapters provide more details on identifying and allocating specific types of expenses.

It covers the following topics:

  • Administering expenses: basic rules and responsibilities
  • What are regulated expenses, and who can authorize them?
  • Relationship between non-monetary contributions and expenses
  • Expenses limit for an election period
  • When expenses are not cancellable
  • Prohibitions on exceeding or circumventing the limit

Administering expenses

Basic rules and responsibilities

The Canada Elections Act sets limits on all expenses that a third party incurs to carry out regulated activities during an election period. The limits are listed below, and the activities are described in chapters 5 to 7. All regulated expenses must be reported in the financial returns.

A third party that is required to register has to maintain proper books and records to ensure accurate reporting of regulated expenses and compliance with the Canada Elections Act. This includes having all financial transactions for regulated activities go through the campaign bank account.

An existing organization (for example, a corporation or union) whose expenses for salaries and overhead are drawn from its regular bank account may continue to pay those expenses from that account, but they must be reported in the financial returns.

The third party's auditor, if one is required, must have access to the third party's books and records at any reasonable time and may require the third party to provide any additional information or explanation needed to prepare the auditor's report.

The campaign bank account must stay open until all unpaid claims and any outstanding balance have been dealt with after the election. The third party must then send the final bank statement to Elections Canada.

What are regulated expenses, and who can authorize them?

Regulated expenses

This handbook uses "regulated expense" as an umbrella term for election advertising expenses, partisan activity expenses and election survey expenses.

Regulated expenses include:

  • amounts paid
  • liabilities incurred
  • the commercial value of donated property and services (other than volunteer labour)
  • the difference between an amount paid or liability incurred and the commercial value of the property or services (when they are provided at less than their commercial value)

When a regulated activity takes place during the election period, the associated expense is subject to the limit for that period, regardless of when the expense was incurred.

The expense is usually the amount that the third party was charged for property or services related to a regulated activity, unless this amount was less than 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)

In other words, commercial value is generally the amount charged in a store for an item or a service.

Who can authorize expenses?

Expenses incurred during an election period for regulated activities must be authorized by the financial agent or a person authorized in writing by the financial agent.

Note: Delegating a person to incur expenses for regulated activities does not limit the responsibility of the financial agent.

Non-monetary contributions are also expenses

The third party incurs an expense when it accepts a non-monetary contribution in relation to a regulated activity.

When property or services are received from a contributor at no charge, the full commercial value is a non-monetary contribution. (Keep in mind that if a service is provided free of charge by an eligible volunteer, there is no contribution and no expense. See Volunteer labour in Chapter 3 for details.)

When property or services are purchased for less than commercial value, the difference between the purchase price and the commercial value is a non-monetary contribution.

In both cases, the full commercial value of the property or service is a regulated expense.


A third party engages a Canadian corporation to design election advertising material for the upcoming election, and the corporation gives the third party a 30% discount, which it does not offer to other customers. As a result, the corporation has made a non-monetary contribution (30% of the commercial value of the service) to the third party. The full commercial value of the service (the amount the corporation would normally charge for the service) is an election advertising expense subject to the limit for the election period.

Note: If the commercial value of a non-monetary contribution provided for regulated activities is $200 or less, and it is from an individual (who is a Canadian citizen or permanent resident) not in the business of providing that property or service, the contribution is deemed to be nil and no expense has to be reported.

Expenses limits for an election period

Expenses limits

The Canada Elections Act imposes limits on expenses that a third party can incur for regulated activities conducted during a general election or by-election.

There is an overall limit on the third party's total expenses and a local limit on expenses targeting a given electoral district.

Limits on expenses for regulated activities between April 1, 2021, and March 31, 2022*
Where the limit applies General election By-election
Overall $525,700 n/a
Given electoral district $4,506 $4,506

*These limits have been adjusted for inflation for 20212022. The base amounts are $350,000 and $3,000 for a general election period, and $3,000 for a by-election.

Note: The election period starts on the day the election is called and ends on election day when the polls close.

Limit in a given electoral district

The expense for a regulated activity always counts against the overall limit. It also counts against the local limit in a given electoral district if it promotes or opposes one or more specific candidates in that district.

For example, a regulated activity counts at the local level if it:

  • identifies a specific candidate by name, photo, image, etc., or
  • takes a position on an issue associated particularly with a candidate (not just the party in general)

An activity does not have to take place within the electoral district to count locally. For example, a highway sign that names a candidate (other than a party leader) is subject to the local limit even if it is outside the riding boundaries.

Note: Activities that identify a registered party rather than a candidate may still count against the local limit, if there is evidence that the third party is in fact conducting candidate-targeted activities that purport to be party-targeted ones (for example, based on public statements or heavy spending in a few ridings).

If candidates from multiple electoral districts are targeted in an activity, the expenses should be allocated against the local limits in a reasonable way. This may be an equal allocation among electoral districts or an allocation based on the geographic size or population size of each district.

It is possible to allocate:

  • production cost, if it is different for each electoral district (e.g. the number of signs or flyers used)
  • distribution cost, if it is different for each electoral district (e.g. social media ad reach, postage)
  • both production and distribution costs, if one communication is distributed through one medium to reach all electoral districts (e.g. a regional television or radio ad)

Note: It is not possible to allocate production or distribution costs if only one candidate is targeted, even if distribution goes beyond the candidate's electoral district. The full expense for the activity counts toward the local limit.

When expenses are not cancellable

In the case of a non-fixed-date general election or a by-election, a third party might not be able to cancel a regulated activity on the day the election is called. Under these circumstances, the third party is deemed not to have incurred regulated expenses for the uncancellable activities.

Prohibitions on exceeding or circumventing the limit

A third party is prohibited from:

  • exceeding the limit on expenses incurred for regulated activities
  • circumventing, or attempting to circumvent, the limit on expenses for regulated activities

Circumventing the limit includes the third party splitting itself into two or more third parties, or acting in collusion with another third party, so that their combined regulated expenses exceed the limit.

It is possible to share or use another third party's material, as long as this action does not violate the prohibition on circumventing the limit. Using material produced by another third party may result in a non-monetary contribution from that other third party and a regulated expense for both third parties, assuming they both used the material.