This document was written by NDP federal office, and is an interpretation of the pending legislation as it applies to our party. There is also a brief Question & Answer summary included at the end of the document. There is also a dowloadable Rich Text Format version of this document, including the Question & Answer highliights. We have also included one further document summarizing the election rules, taken from the Elections Canada website. The Elections Canada document is detailed and worth reading.
Question & Answer Highlights, click here.
Downloadable RTF Document, click here
Downloadable Elections Canada Rule Summary (Adobe Acrobat), click here
New rules for federal riding associations 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.
The most significant changes affecting riding associations (known as electoral district associations by Elections Canada) are around the registration of ridings, new rules on contributions, financial reports and public disclosure of information.
Some key points include:
This document is intended to assist ridings in adjusting to the new rules. However, it is not an exhaustive guide. Please consult the Elections Canada guide entitled Registration and Political Financing of Electoral District Associations - New Rules on January 1, 2004 (attached), which is available on the Internet at www.elections.ca. You will find more detailed information in the Registered Association Handbook also on Elections Canada's website.
In addition to the rules listed below, it is important to note that the Elections Act contains an important "anti-avoidance clause". This means that a riding or individual that may be following the letter of the law but actively working against the intention of the law could be found guilty of an offence.
If a riding association wants to accept contributions, provide goods and services or transfer funds, it must register with Elections Canada. No riding can spend or receive money after January 1, 2004 unless it is registered.
Ridings MUST check with an NDP staff organizer prior to registering to determine the process, to get appropriate documents and to determine the best registration option for your riding. If you have already received information and forms from an organizer, please complete them and follow the instructions you have been given. If you have not received information or have questions, please contact your organizer or call Federal Office.
Your riding will be required to appoint a financial agent and an auditor for this process. Please check with your organizer for instructions.
Once Elections Canada has accepted your application for registration, your financial agent will be required to adhere to the new rules as outlined by Elections Canada and below.
All sources of revenue MUST be tracked and there are new rules on who may contribute to political parties. Elections Canada will be providing software that will make this task much simpler, but we have also provided you with a tracking sheet that should help you in the interim.
Under the new rules, an individual may contribute up to $5,000 in any year to all bodies of the Party. That total would include all contributions to nomination contestants, candidates, ridings, leadership contestants andthe Federal Office. This limit excludes bequests.
Unions may contribute only $1,000 annually to NDP nomination contestants, candidates, ridings, leadership contestants (inclusive). They cannot donate to the central NDP (i.e. Federal Office).
Under internal NDP rules, riding associations may not accept contributions from unions. This is because the above-mentioned limit of $1,000 applies to the sum total of donations from all bodies within a union to the sum total of all ridings, campaigns and nomination contestants. For example, if Local 123 of Union XYZ gave $1,000 to your riding association, no other local or the head office of Union XYZ would be allowed to make any other federal NDP political contributions this year.
Ridings, nomination contestants and candidates may continue to receive donations from small business as long as they operate in Canada and are Canadian owned, are not publicly traded and provided their policies and actions do not conflict with current NDP policy.
Further, their total contributions to all the Federal NDP riding associations, candidates, and nomination contestants MUST NOT exceed $1,000 per fiscal year. The small business is responsible to ensure that they are not exceeding their personal contribution limits. The owners of such businesses are subject to their own personal limits if they make contributions from their personal accounts.
Unincorporated associations (formal organizations that are not incorporated) are not allowed to make direct contributions. They may, however, act as a fundraiser and gather up to $1,000 annually, provided that they source and track the original donors.
These associations might include a Labour Council, and NGO or a community association.
Anonymous contributions can be accepted as long as they do not exceed $25 and the individual is legally entitled to contribute (i.e. a Canadian citizen or permanent resident).
If an event is held where there is a "pass the hat", you must keep track of all pertinent details (i.e. time and place of event, number of people in attendance, total collected, purpose of the event).
Examples of donations that do not constitute an official contribution for the purpose of the contribution ceiling include:
Transfers between federal entities are generally permitted. Candidates for nomination may transfer money to the Federal Office or the riding that held the nomination race. However, no-one can transfer money to the nomination contestant. Therefore, donations to nomination contestants are no longer receiptable for tax purposes. Donations to nomination contestants will however, still count toward the donor's maximum annual donation.
Ridings must submit annual reports to Elections Canada detailing revenue and expenditures. Elections Canada will provide software and forms to simplify this process. The fiscal year is the calendar year and reports are due five (5) months after the end of the fiscal year. Please consult the website at www.elections.ca for more details on the requirements. (See page five and six of the Elections Canada Manual entitled Registration and Ppolitical Financing of Electoral District Associations - New Rules on January 1, 2004.)
Within six months of the riding becoming registered, a statement of assets and liabilities must be submitted to Elections Canada. This report must include all monies owed to and by the riding association as of the day before the registration took effect. In most cases this will be December 31, 2003 since ridings should not have been spending or receiving prior to registering.
Ridings that receive or spend more than $5,000 must have their financial statements audited. Elections Canada will pay to a maximum $1,500 for these services for each riding.
Ridings now have the right to issue tax receipts. However, this right is not automatic upon registration. In order to have the right to issue tax receipts the riding must first register with Elections Canada.
Following registration please contact the Assistant Federal Secretary through his assistant, Carmel Belanger, by e-mail at cbelanger@fed.ndp.ca to request tax receipting privileges. These tax receipting privileges will not be unreasonably withheld.
If a riding does not wish to process donations and issue receipts, the Federal Office can provide this service for you for a fee of 20% of the donation. You can contact Lucy Ladouceur, the Party's Senior Bookkeeper, at lladouceur@fed.ndp.ca to make these arrangements.
While some ridings may choose to issue their own tax receipts, they may wish to contact Federal Office to process credit card donations. The same 20% fee will apply.
Please note, donated goods and services are not eligible for a tax receipt.
Elections Canada has provided a standard receipt for riding associations (a sample is attached). They will not be making paper copies of these, so the riding using the electronic version can reproduce them, or the receipts will be printed directly from the software provided by Elections Canada if you are using it. Only the financial agent can issue receipts.
This receipt can be used either for tax receipting or for receipts that are not for tax purposes. When issuing a receipt the financial agent must check the appropriate box indicating whether or not this is a tax receipt. (The latter can be used to assist individuals in tracking their yearly contributions and for the riding to track its contributions.)
There are two reasons why a receipt would be issued that would not grant the contributor a tax credit: 1) the person may not want a tax receipt, 2) they have made a contribution of a good or service that must be recorded but is not eligible for a tax credit.
Receipts should be issued promptly, but only after the cheque or credit card has cleared.
Please be aware that the rules for fundraising events need to be followed closely. Below are some examples. (Remember that some contributions of goods and services will be considered to have a 'nil value' as stated earlier.)
| a) | If the speaker is not Canadian, they cannot donate any portion of their fee. |
| b) | Canadian speakers, like all individual Canadians can make a total annual contribution of $5,000 to the NDP. If they wish to donate a portion of their regular speaker's fee to the sponsor, they will not be eligible for a tax credit for this amount, but it will count toward their ceiling. The sponsor of the event must monetarily compensate for any amount above the speaker's ceiling. |
| c) | Unincorporated associations such as (theatre troupes, bands, choirs) may not contribute their services and must be compensated at their fair market value. Individuals belonging to such groups may fall into the category of speaker as defined above if they provide their services as individuals. |
| 4) | Garage sales: Just like auctions the donor of the article for sale must identify the market value of the donated auction item. A receipt (not for tax purposes) must be issued to the donor and will count toward their annual contribution ceiling. Please note this is not a tax receiptable contribution since it is a good or service. We strongly recommend that items for sale are sold for less than market value since a receipt to the buyer would otherwise have to be issued. |
Federal and provincial memberships continue to be reciprocal. That is, there is only one membership in the Party. You may join through the Federal or Provincial Party, but your membership is effective at both levels. Please note while the Federal Party will not turn away renewals we have agreed not to actively seek them. Renewals should continue to be processed through the Provincial/Territorial Party.
Individuals who donate more than the minimum membership fee to the Federal Party will be eligible for a tax receipt for the amount above the fee.
Ridings may not deposit membership donations into their own accounts. These donations must be sent to federal or provincial offices.
The new act also made tax credits for individuals more generous. The new tax credits are as follows:
Will my riding association be required to register with Elections Canada?
Yes. Your riding will not be able to spend or receive any money if it is not registered with Elections Canada.
Will my registered riding association be able to receive money and simply put it in the bank?
Once your riding is registered with Elections Canada, you can deposit money in your riding account provided you have recorded the source of the donation. You must record the donor's name and address or in the case of an anonymous donation, details of the event at which the collection was made (see below).
Do I have to revenue share donations to my riding with the Federal or Provincial Parties?
No, it is illegal to transfer funds between the federal ridings and provincial sections. As a result, your riding will be able to keep 100 percent of its donations.
Do the new rules mean that we can no longer "pass the hat" at a meeting or raise anonymous contributions?
No. If a riding wishes to "pass the hat" it may do so as long as donations do not individually exceed $25 and are given by a person who is legally entitled to contribute (a Canadian citizen or permanent resident, not a union or corporation, etc.). You must also keep track of all the pertinent information: the date of the event where the anonymous money was collected, the number of people in attendance, the total amount collected at that time, and the location and purpose of the event (i.e. riding association meeting, nomination meeting, fundraiser, etc.).
What happens if my riding cannot determine where a contribution of $25 or more came from?
If you do not have the name and address of the contributor of such a donation, you must forgo that money and send it to Elections Canada (or return it to the donor if there is any way to do so). All donations must have an identifiable source.
Can my riding solicit money from unions?
No. While the Act allows limited contributions of $1,000 annually to nomination campaigns, candidates or ridings, the NDP prohibits them from accepting such contributions. The reason for this is that the $1,000 would represent the sum total of all locals within a union and their National Office to the sum total of all 308 ridings, campaigns and nomination contestants. As a result, it will be too difficult to ensure that the law is not being broken. Even if it were permitted, the amounts this could represent for a riding or campaign would be insignificant.
Can my riding solicit money from local small businesses?
Yes. As long as their total contributions to all the Federal NDP riding associations, candidates, and nomination contestants does not exceed $1000 per fiscal year, small businesses may contribute to them. The Federal NDP will not allow these contributions unless the business is Canadian owned and operated and not publicly traded on the stock market. The small business is responsible to ensure that they are not exceeding their personal contribution limits. The owners of such businesses are subject to their own personal limits if they make contributions from their personal accounts.
Will my riding executive be required to issue tax receipts?
No. If a riding would rather not have to do the administrative work of tracking donations and remitting receipts, they can ask to have this work done by Federal Office. However, there will be a 20% administrative charge on these donations to do this work. Remember that if you choose to have the tax receipts done through Federal Office you will only be able to directly deposit certain types of donations. These would include donations for which the donor does not require a Federal Tax Receipt, anonymous contributions of $25 or less (as mentioned above), and that any small business contribution would not be allowed since Federal Office is unable to remit receipts for these.
What about credit card donations?
The Federal Office will process credit card donations for fFederal rRiding aAssociations and remit appropriate tax receipts as long as the contribution is not from a small business. The service fees will be 20% for these donations as well. There will be no additional fees charged by the Federal Party even though the credit card companies will require a percentage from these donations as well. This may be a good alternative for some ridings to avoid setting up an expensive credit card system.
Are ridings required to have a financial agent (like an official agent in a campaign)?
Yes. In order to be registered, spend or receive any money (even transfers from the Federal Office or commercial transactions), your riding must always have a financial agent.
Are ridings required to have all financial reports to Elections Canada audited?
No. You are only required to have your financial reports audited if your riding spent or received more than $5,000 in a fiscal year.
Are auditing costs covered by Elections Canada the way they are in a campaign?
Yes. Elections Canada covers up to $1,500 of auditing fees and will pay them directly to the auditor if the riding has spent or received more than $5,000 in a fiscal year. This is, however, NOT true for nomination contestants.
My riding's fiscal year is April 1st to March 31st. Do I have to change it?
Yes. Elections Canada requires that your fiscal year begin on January 1st and end on December 31st.
Will my riding association be required to register with Elections Canada?
Yes. Your riding will not be able to spend or receive any money if it is not registered with Elections Canada.
Will my registered riding association be able to receive money and simply put it in the bank?
Once your riding is registered with Elections Canada, you can deposit money in your riding account provided you have recorded the source of the donation. You must record the donor's name and address or in the case of an anonymous donation, details of the event at which the collection was made (see below).
Do I have to revenue share donations to my riding with the Federal or Provincial Parties?
No, it is illegal to transfer funds between the federal ridings and provincial sections. As a result, your riding will be able to keep 100 percent of its donations.
Do the new rules mean that we can no longer "pass the hat" at a meeting or raise anonymous contributions?
No. If a riding wishes to "pass the hat" it may do so as long as donations do not individually exceed $25 and are given by a person who is legally entitled to contribute (a Canadian citizen or permanent resident, not a union or corporation, etc.). You must also keep track of all the pertinent information: the date of the event where the anonymous money was collected, the number of people in attendance, the total amount collected at that time, and the location and purpose of the event (i.e. riding association meeting, nomination meeting, fundraiser, etc.).
What happens if my riding cannot determine where a contribution of $25 or more came from?
If you do not have the name and address of the contributor of such a donation, you must forgo that money and send it to Elections Canada (or return it to the donor if there is any way to do so). All donations must have an identifiable source.
Can my riding solicit money from unions?
No. While the Act allows limited contributions of $1,000 annually to nomination campaigns, candidates or ridings, the NDP prohibits them from accepting such contributions. The reason for this is that the $1,000 would represent the sum total of all locals within a union and their National Office to the sum total of all 308 ridings, campaigns and nomination contestants. As a result, it will be too difficult to ensure that the law is not being broken. Even if it were permitted, the amounts this could represent for a riding or campaign would be insignificant.
Can my riding solicit money from local small businesses?
Yes. As long as their total contributions to all the Federal NDP riding associations, candidates, and nomination contestants does not exceed $1000 per fiscal year, small businesses may contribute to them. The Federal NDP will not allow these contributions unless the business is Canadian owned and operated and not publicly traded on the stock market. The small business is responsible to ensure that they are not exceeding their personal contribution limits. The owners of such businesses are subject to their own personal limits if they make contributions from their personal accounts.
Will my riding executive be required to issue tax receipts?
No. If a riding would rather not have to do the administrative work of tracking donations and remitting receipts, they can ask to have this work done by Federal Office. However, there will be a 20% administrative charge on these donations to do this work. Remember that if you choose to have the tax receipts done through Federal Office you will only be able to directly deposit certain types of donations. These would include donations for which the donor does not require a Federal Tax Receipt, anonymous contributions of $25 or less (as mentioned above), and that any small business contribution would not be allowed since Federal Office is unable to remit receipts for these.
What about credit card donations?
The Federal Office will process credit card donations for fFederal rRiding aAssociations and remit appropriate tax receipts as long as the contribution is not from a small business. The service fees will be 20% for these donations as well. There will be no additional fees charged by the Federal Party even though the credit card companies will require a percentage from these donations as well. This may be a good alternative for some ridings to avoid setting up an expensive credit card system.
Are ridings required to have a financial agent (like an official agent in a campaign)?
Yes. In order to be registered, spend or receive any money (even transfers from the Federal Office or commercial transactions), your riding must always have a financial agent.
Are ridings required to have all financial reports to Elections Canada audited?
No. You are only required to have your financial reports audited if your riding spent or received more than $5,000 in a fiscal year.
Are auditing costs covered by Elections Canada the way they are in a campaign?
Yes. Elections Canada covers up to $1,500 of auditing fees and will pay them directly to the auditor if the riding has spent or received more than $5,000 in a fiscal year. This is, however, NOT true for nomination contestants.
My riding's fiscal year is April 1st to March 31st. Do I have to change it?
Yes. Elections Canada requires that your fiscal year begin on January 1st and end on December 31st.