With five fixed-date provincial general elections and two territorial general elections occurring this Fall, businesses and others should ensure they are complying with the rules governing political contributions in each province and territory.
In 2011, general elections will be held in the following provinces and territories: Manitoba (Oct. 4), Newfoundland and Labrador (Oct. 11), Northwest Territories (Oct. 3), Ontario (Oct. 6), Prince Edward Island (Oct. 3), Saskatchewan (Nov. 7) and Yukon (Oct. 11).
This bulletin does not address the law in Canadian jurisdictions that are not holding general elections in Fall 2011. References such as "everywhere" and "all jurisdictions" must be read accordingly.
Many jurisdictions limit the size of political contributions, and some limit the types of contributors. For example, Manitoba does not allow corporations or trade unions to contribute and some jurisdictions do not allow non-residents to contribute.
All provinces and territories impose similar rules to ensure the openness and transparency of the system. Rules that tend to be consistent across the country include the following:
- The amounts of political contributions, except very small ones, and the identities of their contributors, are publicly disclosed.
- A person may not make a contribution with funds that do not belong to the person.1
- A person may not make a contribution with funds given by another for that purpose.2
- The receipt must be issued in the name of the contributor.
- The value of donated goods and services is typically treated as a contribution.
In the case of contributions made through fundraising dinners or receptions, the motivation for purchasing a ticket does not alter the fact that the purchase is a political contribution. For example, a business might buy tickets to a political reception for the purpose of networking or to speak to certain individuals expected to be present. Regardless of the reason for attending the reception, a political contribution has been made.
The rule against making contributions with the funds of another applies to tickets to political fundraising events. If a corporation is going to pay for a ticket (in jurisdictions where corporate contributions are allowed), then the purchase should be made by company cheque; it is not appropriate for an employee to pay, claim the contribution as his or her own and then be reimbursed by the employer. If an individual is going to buy a ticket, then the individual must use his or her own money; the individual cannot later be reimbursed by the company.
Newfoundland and Labrador, Prince Edward Island, Saskatchewan and Yukon do not limit the size of contributions. Manitoba limits an individual's total political contributions (to one or more candidates, constituency associations and political parties) to $3000. The Northwest Territories limits contributions to $1500 per candidate, but contributions of office space and transportation services are exempt from the limit.
Ontario limits contributions in a calendar year to $9300 per party and $1240 per riding association (to a maximum of $6200 to the riding associations of each party). In addition, during a campaign period, one may contribute up to an additional $9300 per party and $1240 per candidate (to a maximum of $6200 to the candidates of each party).
More specific detail appears in the jurisdictional summaries at the end of this bulletin.
Contributions of Goods, Services and Labour
As a general rule, political contributions include donations of money and donations of goods or services.
In jurisdictions where the size of contributions is capped, the cap applies to the total value of money, goods and services that have been contributed. Goods and services are typically valued based on their commercial or market value.
Providing volunteer labour – that is, activity on behalf of a political party or candidate for which an individual receives no compensation – is not a contribution. This exception applies to genuine volunteer labour: in all jurisdictions but Ontario, if an employer pays an employee to campaign (i.e., if campaigning takes place on the employer's time) then the employer has made a political contribution equivalent, depending on jurisdiction, to the amount of the employee's salary or the value of the employee's services. Based on the interpretation of Elections Ontario, the rule in Ontario is different: If an employee agrees to be assigned to a political campaign while remaining on the employer's payroll, then neither the employer nor the employee is considered to have made a contribution.3
In some jurisdictions (Manitoba, Northwest Territories, Prince Edward Island), self-employed individuals cannot volunteer services that they otherwise sell to paying customers. Where a self-employed individual gives away such service for free, he or she is deemed to have made a political contribution for the value of the service.
Contribution of Advertising
Special rules govern advertising, the contribution of advertising and advertising by third parties. Before undertaking any of these activities it is prudent to obtain legal advice.
Newfoundland and Labrador, Prince Edward Island and Yukon allow contributions from individuals and corporations that are not residents of the province or territory. Saskatchewan also allows contributions from outside the province, but requires that the contributor be a Canadian resident or Canadian citizen.
Manitoba restricts contributions to an individual normally resident in the province. The Northwest Territories restricts contributions to individuals resident in the Northwest Territories, corporations carrying on business in the Northwest Territories and associations and organizations operating in the Northwest Territories. Ontario does not permit contributions from a person normally resident outside Ontario, a corporation that does not carry on business in Ontario or a trade union that does not hold bargaining rights for Ontario workers.
The Elections Finances Act4 restricts political contributions to individuals normally resident in Manitoba. Therefore, corporations and trade unions are not allowed to contribute. In each calendar year, an individual may contribute $3000 in aggregate to one or more candidates, constituency associations and registered political parties, or any combination of them.
The donation of a good or service worth less than $25 is not a contribution, except that after an individual has made two such donations in a year to the same candidate, leadership contestant, riding association or party, any subsequent donation of a good or service in the same year is a contribution.
An anonymous contribution of more than $10 may not be retained.
Newfoundland and Labrador
The Elections Act, 19915 places no limits on the size of political contributions. Only individuals, corporations and trade unions may contribute.
Individuals may contribute whether or not they reside in Newfoundland and Labrador. Corporations may contribute whether or not they carry on business in the province. Trade unions may contribute whether or not they hold bargaining rights for employees in the province.
An anonymous contribution greater than $100 may not be retained.
Contributions from individuals, corporations and trade unions may be made through an unincorporated association or organization (other than a trade union) provided that the individual sources and amounts making up the contribution are recorded.
Contributions from trade unions are considered to be made by the unions and not by their individual members.
Neither a trade union nor an employer shall make contributions through payroll deductions or make it a condition of employment or union membership that an individual make a political contribution.
There are no political parties in the Northwest Territories. All candidates run as independents.
The Elections and Plebicites Act6 prohibits a contribution from being made outside the campaign period. For this general election, the campaign period begins on the date that a candidate is nominated and ends Oct. 3.
No individual, corporation, association or organization may contribute more than $1500 to each candidate. The $1500 limit applies to the total value of all monetary and non-monetary contributions to the candidate, subject to two exceptions: contributions of transportation services and office premises may exceed $1500 in value. (There is no limit on the value of transportation services and office space that may be contributed.)
An anonymous contribution may not exceed $100.
A contributor must be an individual who is resident in the Northwest Territories, a corporation that carries on business in the Northwest Territories or an association or organization that operates in the Northwest Territories.
The Election Finances Act7 states that contributions may only be made by an individual normally resident in Ontario, a corporation that carries on business in Ontario (and is not a registered charity) and a trade union that holds bargaining rights for employees in Ontario (including a central, regional or district labour council.)
The law imposes the following limits on the total size of contributions in any calendar year:
- $9300 to each party
- $1240 to each constituency association, to an aggregate maximum of $6200 to the constituency associations of any one party
During a campaign period, which in this case runs from Sept. 7 to Jan. 6, 2012, a contributor may provide up to:
- an additional $9300 to each party
- $1240 to each candidate, to an aggregate maximum of $6200 to the candidates of any one party
Effectively this means that in an election year the limits on the sizes of contributions are doubled.
Associated corporations8 may contribute separately and are subject to separate contribution limits, so long as each one carries on an active business.9 Otherwise the corporations are treated as a single contributor.
No anonymous contribution (except a contribution of up to $10 collected at a meeting) is permitted.
Contributions may be made through an unincorporated association or organization (other than a trade union) provided that the individual sources and amounts making up the contribution are recorded.
If the value of goods or services provided in a calendar year or in a campaign period does not exceed $100, then the provider of the goods or services may elect not to treat them as a political contribution.
Prince Edward Island
The Prince Edward Island Election Expenses Act10 places no limit on the size of political contributions. Only individuals, corporations and trade unions may contribute. Contributions may be made by non-residents.
Any contribution from an anonymous donor is forfeited to the Crown.
The Election Act, 199611 does not limit on the size of political contributions.
Individuals, corporations, trade unions and unincorporated organizations may make contributions.
A contributor must be resident in Canada or, if not resident in the country, must be a Canadian citizen.
No person shall make an anonymous contribution in excess of $250.
The Elections Act (Yukon)12 does not limit the size of contributions. Contributions may be made by individuals, corporations or trade unions and other unincorporated groups.
There are no restrictions on contributions from non-residents.
A candidate or registered political party shall not accept an anonymous contribution.
Where a trade union's contribution results from a collection from the union's members, the contribution is considered to be a contribution from the trade union. Otherwise the trade union must submit a statement disclosing the name and address of and the amount contributed by each contributor of more than $250 to the total contribution (or indicating that there are no contributors of more than $250 if that is the case). Any other unincorporated contributor must submit the same information.
1. For example, the Saskatchewan law states that "No person shall make a contribution ... unless the contribution is paid out of moneys to which that person is beneficially entitled."
2. See, for example, the Manitoba law, which provides that "No individual shall contribute ... (a) any money, goods or services not actually belonging to the individual; or (b) any money, goods or services that have been given or furnished to the individual by another person or an organization for the purpose of making the contribution." For greater certainty, the Manitoba statute prohibits an individual from making a contribution expecting to be reimbursed or compensated for all or part of its value by another person or organization and prohibits any person or organization form reimbursing or otherwise compensating or offering to reimburse or otherwise compensate any individual for all or any part of the value of a contribution.
3. Elections Ontario. (2011). CFO handbook for candidates, pp. 19-20.
4. C.C.S.M., c. E32.
5. S.N.L. 1992, c. E-3.1.
6. S.N.W.T. 2006, c.15.
7. R.S.O. 1990, c. E.7.
8. Within the meaning of s. 256 of the Income Tax Act (Canada).
9. As defined in para. 125(7)(a) of the Income Tax Act (Canada).
10. R.S.P.E.I. 1988, c. E-2.01.
11. S.S. 1996, c. E-6.01, most recently amended by S.S. 2011, c. 5.
12. R.S.Y. 2002, c. 63, am. S.Y. 2004, c. 9.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.