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Draft July 9, 2008

Information Sheet XX
The Purchase of Advertising Space
at Political Events

(Date)

DISCLAIMER

These information sheets set out Elections Canada’s interpretation of the Canada
Elections Act and are issued to assist political entities in understanding the Act. The
views expressed in the information sheets are not law and are not intended to replace the
official text of the Act. How the Act applies to any particular case will depend on the
individual circumstances of that case.

Should you have any questions or comments with regard to this particular information
sheet, please send us an e-mail at …………@elections.ca
Draft July 9, 2008

Table of Contents

Introduction................................................................................................... 1
The Legislative Context................................................................................ 1
The Purchase of Advertising Space at Political Events ............................ 2

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Draft July 9, 2008
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Introduction

1. Elections Canada is often asked questions concerning the “sponsoring”


of events by corporations or other entities or the purchasing of
“visibility” at political events. This type of transaction can lead to
illegal contributions being made. This information sheet aims at
clarifying which transactions meet the requirements of the Canada
Elections Act.

The Legislative Context

2. Only individuals may make contributions.

3. Contributions can be monetary or non-monetary in nature. The Act


defines a monetary contribution as “an amount of money provided it is
not repayable.” It defines a non-monetary contribution as “the
commercial value of a service, other than volunteer labour, or of
property or of the use of property or money to the extent that they are
provided without charge or at less than their commercial value.” 1

4. Therefore, if a political entity receives property or a service for free or


for less than commercial value, the difference between the commercial
value and the amount paid is a non-monetary contribution.

5. These principles guide Elections Canada’s treatment of questions


regarding “sponsorships,” the selling of “visibility” or the plain sale of
advertising space to corporations or other entities in the context of
political events, including fundraising events.

1
S. 2. Also see the definition of “commercial value” in that section. As well, see the soon-to-be-published
information sheet entitled Determining the Value of Election Expenses (Candidates and Registered
Parties).
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The Purchase of Advertising Space at Political Events 2

6. Corporations and other groups or associations sometimes offer to


purchase “visibility” or advertisement space at political conventions or
fundraising events. They may also offer to provide certain goods or
services to attendees of these events.

7. It should be remembered that any person or entity who gives money to


a political entity, provides goods and services for less than commercial
value to a political entity, or purchases goods and services for more
than commercial value from a political entity with the intent of
benefiting that entity will have made a contribution to the registered
party, which would be subject to the rules of the Canada Elections Act.
This applies to a person or entity acting in any capacity, including as a
sponsor.

8. As a corollary principle, any arrangement entered into by any person or


entity, including the purchase of advertising space by a corporation or
other entity or any other commercial arrangement that circumvents the
eligibility, caps or disclosure rules of the Canada Elections Act
respecting contributions, would be contrary to section 405.2 and would
constitute an offence.

9. Accordingly, when a corporation purchases advertising space at a


political event, the political entity that sells it must be able to establish
that the amount paid by the corporation represents the commercial
value for such advertising (that is, the lowest price someone who is in
the business of providing advertising would charge for this service in
the area where it was provided).

10. For example, in the case of an advertisement placed in an event


program or newsletter, the commercial value would be the lowest rate
charged by a publisher that is in the business of selling advertising
space in a general or special interest consumer periodical of equivalent
circulation.

2
This type of arrangement is sometime referred to as a “sponsorship.” Inasmuch as the concept of
sponsorship connotes not just a commercial arrangement but also financial support for the organization
running the activity and its objectives, it would constitute an illegal contribution if made by a corporation.
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11. Similarly, if the advertising space to be purchased constitutes banner
space at a political event, the commercial value would be the lowest
rate charged for equivalent visibility of commercial advertising
placement in public areas such as bus shelters, billboards, etc.

12. It is not appropriate to compare the amount paid by a corporation for


advertising at events organized by charities or other not-for-profit
organizations. This is because part of the amount paid in such contexts
includes sponsorship costs incurred to support the activity and build
goodwill. An amount in excess of the commercial value of any
advertising would, in the context of transactions involving a political
entity, constitute a contribution to that political entity.

13. The political entity must also be able to demonstrate that attendees of
the event represent a market for the purchaser of advertising space. If
this is not the case, the transaction would constitute a contribution.

14. An offer by a corporation or other entity of goods or services to be


distributed or made available to attendees at a political event should be
refused, as the Act provides that the offering of goods or services at less
than commercial value constitutes a contribution. This is so even if such
offering represents a normal business practice in another context.