This article is part of a series extensively covering the 2022 Ontario general election. It provides voters and business leaders a 360 degree view of all the rules and regulations affecting the campaign and voting, as well as insights into news and other developments this election season. It is intended as general guidance only.
To view the rest of our coverage, please visit Ontario Election 2022.
The 2022 Ontario provincial election is taking place on June 2nd. If you or representatives of your business plan on getting involved in the lead up to Election Day, then you should consider the provincial political event rules before making an appearance at or hosting a political event.
This election law primer is intended to convey some important considerations with regard to political events. It is intended as general guidance only. If you have any specific questions or concerns, please contact Awanish Sinha, Hartley Lefton, Amanda D. Iarusso, or Jacob Klugsberg of our firm's Public Sector group. We would be pleased to assist you.
If you or your group are planning to organize a political event, it is important to note that fund-raising and social events are covered by the Election Finances Act.
Under the Election Finances Act, a fund-raising event means:
an event held for the purpose of raising funds for the party, constituency association, nomination contestant, candidate or leadership contestant registered under this Act by whom or on whose behalf the event is held, and where a charge by the sale of tickets or otherwise is made for attendance.1
Fund-raising events include activities such as dinners, dances, sporting events, shows, etc. for which an admission charge is paid.2 Elections Ontario takes the view that where these activities are conducted on a cost-recovery basis, they are not considered fund-raising events under the Act.3 However, the gross income from such an event must still be recorded and reported as a social event.4
Revenue from fund-raising events with tickets sales must be divided between "contribution" and "fund-raising income."5In the case of a fund-raising event involving ticket sales, contribution income represents the price of the ticket minus the direct per person costs (e.g., meals, free liquor, tips, and taxes).6 The remaining amount raised would constitute fund-raising income.7 For example, if a golf tournament has an entry fee of $400, and the direct costs (e.g. caddy fees, equipment, food, taxes, and tips) equal $100, the contribution amount would be $300.8
If a purchaser of a ticket does not attend the fund-raising event, a contribution is still considered to have been given and a tax receipt must be issued to the purchaser for the contribution amount.9
Only eligible contributors may purchase tickets to a fund-raising event and have their purchases be considered contributions. Persons ineligible to contribute (e.g. persons outside Ontario) may still attend a fund-raising event by purchasing a ticket at the cost of the direct expenses but no contribution can be made.10
Social events are activities where the purpose is not to raise funds. The distinction between fund-raising and social events is that fees or prices charged at a social event are usually minimal and are only enough to account for the expenses of the event.11 In the case of a social event, the political entity must still report in their filings the total amount collected from the event.12
Auctions are also a way of raising revenue. However, only eligible contributors-individuals who are resident in Ontario and pay with their own money-can contribute items to an auction.13
Any goods and services donated for an auction are considered to be a contribution. However, if a donor provides a good or service valued at $100 or less, they have the option of declaring it to be a contribution or not.14 The party conducting the auction must carefully maintain a list of the names and addresses of the supplier and note the fair market value of each item.15
Any purchase amount that is more than fair market value must also be considered a contribution. For example, an individual decides to donate an antique valued at $350. The antique is purchased at an auction for $450. In this scenario, the donor contributed $350 by donating the antique and the purchaser contributed $100, representing the difference between the purchase price and the fair market value of the item.16
If a purchaser buys an item for less than its fair market value, the purchaser has not made a contribution and the amount would simply be considered fund-raising income.17 The donor will still be considered to have made a contribution for the fair market value of the item.18
The Bottom Line
There are a number of ways to contribute during an election through social and fund-raising activities, but groups doing so must be careful to abide by the Election Finances Act rules, including those relating to contributions in the form of goods and services.
If you or others in your organization will interact with political parties, candidates, or nomination contestants during the provincial election, take the time to ensure that your internal policies and procedures comply with Ontario's elections laws.
This post is part of our 2022 Ontario Election series. You can access related content here.
1. Election Finances Act, s. 23(1)
2. Election Finances CFO Handbook for Candidates 2022, at p. 45.
5. Election Finances CFO Handbook for Candidates 2022, ibid at p. 46.
9. Election Finances CFO Handbook for Candidates 2022, ibid at p. 47.
13. Election Finances CFO Handbook for Candidates 2022, ibid at p. 48.
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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.