Campaign Financing 
Bulletin Number: C.2.0.0

Rationale:

The legislation strengthens local accountability and serves to make election campaigns more transparent by requiring greater campaign financing disclosure. The legislation also applies to contributions received and expenses incurred in relation to seeking the endorsement of an elector organization. The Ministry has produced an updated Candidate’s Guide that will reflect the following legislative changes affecting candidates.

Note sections in parentheses are relevant Local Government Act (the Act) amendments.

Provisions:

  • The campaign financing rules apply to individuals who are seeking the endorsement of an elector organization (sections 33, 83 and 84). This is accomplished by:

·         changing the definition of "candidate" to include a person who accepts campaign contributions or incurs election expenses with the intention of seeking the endorsement of an elector organization for an election; and

·         expanding the meaning of "election campaign" to include a campaign to promote the selection of an individual to be endorsed by an elector organization.

  • The effect of these changes is that individuals seeking the endorsement of an elector organization must follow the same rules as for "candidates" in an election, e.g., they must record contributions and expenses, etc., and, should the individual become a candidate under section 74 (declaration of candidates), he or she will be required to include in their disclosure statement all campaign contributions received and expenses incurred in relation to obtaining the elector organization’s endorsement (sections 83 and 84).
  • Provisions clarify that all money contributed by a candidate toward his or her own election campaign is a campaign contribution and must be recorded and reported in the same manner as other campaign contributions (section 83). Goods and services provided by a candidate in relation to his or her campaign are not contributions.
  • Elector organizations must appoint financial agents. The Act continues to provide that if a candidate does not appoint a financial agent, the person is his or her own financial agent (s. 85).
  • All financial agents must open separate accounts at a savings institution in the name of the candidate’s or elector organization’s campaign. A savings institution is defined under the Interpretation Act to include banks, credit unions, trust companies, bank subsidiaries under the Trust and Loan Company Act (Canada), and BC Community Financial Services Corporation under the Community Financial Services Act. The accounts must be used exclusively for the election campaign and all contributions received and all expenses made to the election campaign must be processed through the campaign accounts. Note a separate account is required for each candidate as well as for each elector organization (section 85.1).
  • In addition to recording the name of the contributor and date and value of contribution the financial agent must also record the address and classification of the contributor according to one of the following classes (section 88): individuals; corporations; unincorporated organizations engaged in business or commercial activity; trade unions; non-profit organizations; other contributors.
  • If the class of contributor is a numbered corporation or unincorporated organization, the financial agent must also record the names of either two directors or two principal officers of the organization (section 88(1)(e)).
  • Financial records must be retained by the financial agent, candidate or elector organization for seven years (section 88).
  • Candidates’ surplus funds of $500 or more must be paid to the Chief Election Officer (CEO). Surplus funds are funds remaining after:

·         paying election expenses and expenses incidental to the election campaign (e.g., thank -you advertisements for supporters and volunteers, etc); and

·         reimbursing the candidate for any cash contributions made with the candidate’s own money.

  • Surplus funds must be held in trust by the local government and are to be paid to the financial agent of the candidate (including interest) if the person is declared a candidate in the next general election or by-election held before that time. If the candidate does not run again, the funds revert to the local government. Note this provision does not apply to elector organizations (section 89.1).
  • Section 90 (duty to file disclosure statement) is amended to require that only individuals who were declared candidates under section 74 must file a disclosure statement. The amendments also clarify that a disclosure statement is required even if no contributions are received or expenses incurred, or if a candidate is acclaimed, dies or withdraws. The filing deadline for disclosure statements is 120 days after general voting day.
  • The Disclosure Statement must also report (section 90):

REVENUE:

For contributions of $100 or more, full disclosure under section 88(1)(a to e):

·         contribution value;

·         contribution date;

·         name of contributor;

·         class of contribution;

·         two principals/directors of the organization is contribution from either unincorporated organization or numbered company. 

For each anonymous contribution, that exceeds the anonymous contribution limit (more than $50) under section 87, must be transferred to the local government with full disclosure under section 88(1)(a and b):

·         contribution value, and

·         contribution date.

For contributions not referred to in section 90 (4)(b) and (c), the total value of campaign contributions and total number of the contributors from whom they were received.

The payment of any surplus funds from the local government under section 89.1(5)(a) (transfer of candidate’s surplus election funds.

EXPENSE:

Total election expenses as defined under section 83 and valued under section 89.

All election expenses according to classes prescribed by the Lieutenant Governor in Council. ( See Bulletin C.3.0.0). Section 2 of the BC Regulation 380/93 specifies the different expense categories, including:

·         advertising and communications;

·         campaign office expenses;

·         conventions and meetings;

·         other campaign functions (other than convention and meeting);

·         research and polling;

·         transportation; and

·         other.

SURPLUS/DEFICIT:

Any balance for a candidate as referred to in section 89.1(1) (candidate’s surplus election funds), or any equivalent deficit, on the day the report is prepared if there was a surplus as referred to in section 89.1 (1), how that surplus was dealt with.

  • The Act continues to provide for a late filing period (30 days after the end of the filing period). Disclosure statements may be filed during this time period on payment of a $500 late filing penalty (section 90.2).
  • Failure to file a disclosure statement still results in an "automatic" disqualification (i.e., no court declaration of disqualification is required). Failure to file results in:

·         the office of an elected member becoming vacant;

·         for all candidates, being disqualified until after the next general election;

·         for elector organizations, being disqualified from endorsing a candidate until after the next general election (section 92 and 92.1).

  • Filing a false or incomplete disclosure statement or supplementary report can also result in the disqualification of a candidate until after the next general election. Challenges to the accuracy or completeness of a candidate’s disclosure statement or supplementary report may be made by:
    • a council under section 214 (resolution declaring council member disqualified);
    • by 4 electors of the local government applying to the Supreme Court under section 213 (application to court to declare council member disqualified);
    • an elector, another nominee or the CEO under section 75 (challenge of nomination), if the person tries to run in the next general election or a by-election held before that time; or
    • prosecuting the person for an election offence under section 153(6)(a) or (b) (providing false or misleading information or making a false or misleading statement).
  • In order to avoid disqualification for filing a false statement or report, a candidate must show the court that he or she exercised due diligence to ensure that an accurate disclosure statement was filed (section 92.4).
  • For elector organizations, filing a false or incomplete disclosure statement or supplementary report can result in the organization being disqualified from endorsing a candidate until after the next general election. Challenges to the accuracy or completeness of an elector organization’s disclosure statement or supplementary report may be made by an elector, another nominee or the CEO under section 75 (challenge of nomination), if the organization tries to endorse a candidate in the next general election or a by-election held before that time. In order to avoid disqualification for filing a false statement or report, the financial agent of the elector organization must show the court that he or she exercised due diligence to ensure that an accurate disclosure statement was filed (section 92.5).
  • Provisions respecting supplementary reports (formerly known as "updated disclosure statements") have been clarified. Supplementary reports are required if any information required to reported in a disclosure statement changes or if the financial agent, candidate or elector organizations discovers that the statement did not completely or accurately disclose the required information. Furthermore, the amendments make it clear that filing a supplementary report to correct or complete information does not automatically prevent disqualification for filing a false disclosure statement; to avoid disqualification, due diligence must be shown. The 30 day deadline for filing a supplementary report has not changed (sections 90.1, 92.4, and 92.5).
  • A candidate or electoral organization may seek relief from the Supreme Court in relation to the filing obligations for disclosure statements and supplementary reports. Application to the court in relation to a disclosure statement can only be made up until the end of the late filing period. In determining an application for relief, the court, if it considers that the financial agent and, if applicable, the candidate have acted in good aith, may:

·         relieve the candidate or elector organization from the obligation to file the statement or report, or from specified obligations in relation to the statement or report; or

·         grant an extension of the time for filing, with or without payment of the late filing penalty of $500 (section 91).

  • The election offences in relation to campaign financing have also been modified. The Act stipulates that a person contravening any of the following commits an offence:

·         section 85.1 (campaign accounts);

·         section 86 (restrictions on accepting contributions and incurring expenses);

·         section 87 (restrictions on making campaign contributions);

·         section 89.1(4) (transfer of candidate’s surplus campaign funds); and

·         section 90 (duty to file disclosure statement)

  • Campaign financing disclosure statements and supplementary reports must be kept by the local government for public inspection for seven years after the general voting day to which they relate (section 93).

Local Government Act References:
Primary Sections: 33, 75, 83 to 93,153, 153.1, 156

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