Updated July, 2004
This tax credit program is no longer in effect. Given the power it had to empower taxpayers, is it any surprise.
Updated January 9, 2003
Canadian Political Contribution Tax Credit Law[info]
The legal theory of political contribution depends on
"political purpose" [info]
Political Contribution Tax Credit - Claims made on Lines 409 & 410[info]
Tax planning considerations make registered agency seasonal work [info]
Comments on Irrelevant sections of the Income Tax Act [info]
Summary of Comments on the Income Tax Act [info]
ELECTIONS ACT [info]
OVERALL CONSIDERATIONS [info]
Social Economic Committee (SEC) [info]
Party resolution to make tax credits as proven
in Longley v. Her Majesty the Queen. [info]
Committee Member Definition [info]
Duties and Freedoms of the Individual Registered Agent [info]
Duties of the Individual Registered Agent to the Chief Agent [info]
OFFICIAL RECEIPTS and BOOKKEEPING REQUIREMENTS [info]
Possible Registered Agent’s Bank Account [info]
CONTRACT BETWEEN THE REGISTERED AGENT
AND THE CHIEF AGENT [info]
EXAMPLES OF TAX CREDIT CLAIMS [info]
PAYMENT FOR GOODS & SERVICES OR
THE GIVING OF GIFTS & GRANTS [info]
PAYMENT FOR GOODS AND SERVICES [info]
e.g. Metro or Bus Passes, etc. [info]
HEMP STORES [info]
JOB CREATION [info]
COMMUNITY AND REGIONAL DEVELOPMENT [info]
BUSINESS DEVELOPMENT [info]
PAYING PROFESSIONAL FEES [info]
EVEN AFTER DEATH [info]
GIFTS AND GRANTS [info]
CHILD CARE GRANTS [info]
YOUTH GRANTS [info]
GIFTS TO NON-PROFIT ASSOCIATIONS [info]
CANNABIS COMPASSION CLUBS [info]
HEALTH CARE [info]
AMATEUR SPORT AND FITNESS FUNDING [info]
AFFORDABLE HOUSING GRANT [info]
ARTS AND CULTURAL GRANTS [info]
THERE ARE MANY POSSIBLE EXAMPLES [info]
TAXPAYERS COULD BECOME THEIR OWN REGISTERED AGENT [info]
TAX CREDITS DURING AN ELECTION [info]
Tax Credit Rhetoric [info]
Profit from Protesting the Prohibition of Pot [info]
Statement of Ideals [info]
Report of the Committee on Election Expenses [info]
Commons Debates [info]
Senate Debates [info]
Shocking statistics about political contribution tax credits [info]
Profit from Protesting the Plutocracy [info]
The unknown future of tax credit use [info]
POLITICAL CONTRIBUTION TAX CREDIT LAW
Canada’s income tax law, in section 127(3), provides for a $500 tax credit to reduce the tax payable by those taxpayers who make financial contributions through official politics. Since 1974, when this tax credit started, 99.8% of that potential has never been used. This document explains ways that tax credit law can be better used, in order to inspire more participation in the political process through creative use of the tax credit incentive. Full knowledge of the tax credit provision can make it personally profitable to participate.
The legal theory of political contribution depends on "political purpose"
In Conservative Central Office v. Burrell  2 All ER 1, at pp. 7 e to 8 e, Lord Brightman, speaking with the agreement of the Court of Appeal, stated:
"No legal problem arises if a contributor (as I will call him) hands to a friend (whom I will call the recipient) a sum of money to be applied by the recipient for the political purposes indicated by the contributor, or to be chosen at the discretion of the recipient. That would be a simple case of mandate or agency. The recipient would have authority from the contributor to make use of the money in the indicated way." [Emphasis added]
Lord Brightman’s mandate theory of political contributions is the correct legal theory.
The contributor may be called the "principal" in a relationship with a political party agent. The contributors control whether to contribute, and can direct how their funds are spent.
A legal issue implicated in the tax credit is what are the boundaries of "political purpose."
In McGovern v. Attorney General  3 All ER 493, at p. 509 a to b, Lord Slade provided a definition of political purposes, to distinguish them from charitable purposes. (Lord Slade’s common law consideration of political purposes has been adopted by the Federal Appeal Court of Canada.) Lord Slade’s definition was not intended to be exhaustive, but included (1) furthering the interests of a political party, or (2) procuring changes in the laws or the government’s policies in our country or in another country. The political purpose delivers benefit to party supporters, or their purpose is intentionally engaging in political activity that protests a policy or law, or the lack of a policy or a law. A rule of thumb is that anything the government spends money on is certainly political.
The government’s publications, Information Circular 78-3 and 87-1, have provided some administrative guidelines that defined political purposes and political activities. Political purposes and activities are not defined in the Income Tax Act; however, it is well established in the law that an organization whose purpose is the attainment of a political object is not organized for a charitable purpose. Various activities could be considered political if they will influence or mobilize public opinion, or will embarrass, or otherwise might induce a government to take a stand, change a policy, or enact any law.
Taxpayers are free to act on their own political purposes by funding particular activities. Taxpayers are entitled to their political contribution tax credit. They have a right to arrange their affairs to take advantage of their political contribution tax credit.
A leading authority is Longley v. Her Majesty the Queen, in the Supreme Court of British Columbia: http://www.courts.gov.bc.ca/jdb%2Dtxt/sc/99/11/s99%2D1135.txt
Paragraphs 5 to 15 described five variations of some ways to employ the tax credit.
Paragraphs 61 and 64 concluded that this tax credit scheme was within all the laws.
The conclusion that contributor control and personal benefit is within the language of the law, and is not stopped by anything in the law, was always true and continues to be true. As the judge stated, in paragraph 53, regarding the "political reality … as long as the contribution is made for some political purpose which the party has defined, then the party has had some control over the funds and the fact that the contributor receives the benefit of the contribution is irrelevant." And, as stated in paragraph 57: "… there can be alternative ways of providing for political expression through registered political parties." And, in paragraph 58: "…political parties ... are to be free to use the money contributed to them in whatever way they wish provided only that the use to which the funds are put is not illegal." Paragraphs 123 and 128 stated: "Therefore if the primary purpose of the transaction is, as here, to make a political statement through the auspices of a registered Federal political candidate or registered Federal political party, then the GAAR [section 245, the Federal General Anti-Avoidance Rule] should not be applied because the primary purpose of the transaction is not tax avoidance. … the GAAR could not be successfully applied to disallow political tax credits claimed as a result of contributions made to registered political parties or candidates."
Looking at the GAAR, the General Anti-Avoidance Rule in section 245 of the Income Tax Act, under s. 245(3), as long as the transaction expresses a bona fide political purpose, then s. 245 can have no application against the political contribution tax credit. A bona fide political purpose can be defined and recognized as it is in dictionaries, the common law, and the government’s own publications. (Bona fide means "good faith.") The contributor merely needs to have good faith in their own chosen political purpose. (The transaction should not be agreed to if the contributor has no honest belief in their own choice.) Section 245 has no application against honest belief in a political purpose, since that is the primary purpose of the transaction and therefore it is not tax avoidance. Section 245 talks about the purpose of the transaction, which is the purpose of either the contributor or the registered agent or both recognizing some political purpose agreed on. Tax credit claims are valid when a transaction has a bona fide political purpose, as the reason why the participants directed a contribution to be spent upon a particular activity.
Section 127(3) has the purpose of increasing public participation in the political process. To have a political purpose and fund a political activity is encouraged by the tax credit. To say a person should not receive the tax credit because they were motivated by the tax consideration would negate every tax incentive. The original drafting of s. 127(3) was designed to encourage taxpayers to participate. The tax credit works when doing that. Clearly the tax credit incentive will work even better the more control the contributor has.
Section 245 supports the caution that there should be no de facto refund. Section 245 disqualifies a tax credit benefit if and only if it was done for no other reason but obtaining the benefit. Section 245 effectively disqualifies a universal purpose behind participation, which is that the participants shall pay less tax. Ordinarily, to act to pay less tax is an obviously bona fide political purpose. However, section 245 could be interpreted to indicate that having no purpose other than to pay less tax would be an invalid tax avoidance scheme. But, the tax credit works by encouraging all other political purposes.
Information Circular 75-2R6 ―Contributions to a Registered Political Party or to a Candidate at a Federal Election, provides general tax credit information to the public.
The effect of the tax credit is either to reduce the amount that the taxpayer has to pay or increase the amount of a tax refund that the taxpayer receives back. However, the tax credit is useless to someone who does not pay any income tax. Contributors can claim their political contribution tax credit by following the normal tax forms:
Lines 409 & 410 - Federal Political Contribution Tax Credit
The General Tax Guide uses the following chart to calculate a political contribution tax credit:
Enter on line 409 the total you contributed during a year to a registered federal political party.
(If your total political contributions are $1,075 or more, automatically enter $500 on line 410.)
Receipts - Attach to your paper return your official receipts. You do not have to attach receipts for amounts shown in box 36 of your T5013 slips, or on financial statements showing an amount a partnership allocated to you. If you are using EFILE, show your receipts to your EFILE service provider, and keep the receipts, in case the Canada Customs and Revenue Agency asks to see them.
Tax planning considerations make registered agency seasonal work
The best tax planning is usually for the contributor to contribute later in the tax year, i.e. in fall or winter. The contributor has until midnight December 31 to make a contribution, after which that year’s tax credit can not be claimed. A contributor has only one chance each year to participate, after which their real choice was their default to not participate. A contributor’s choices could be saved up, and the funds from a December contribution one year, and a January contribution the next year, could then be both used to make full payment for something, say in the $2,000 dollar range. The contributor can bank their choices by contributing with the condition that they reserve their right to control later. (A contributor could split their choices to fund more than one different political activity.)
S. 127(3) This section of the tax law sets the political contribution tax credit formula.
The formula is now different than it was during Longley v. Her Majesty the Queen. The political contribution tax credit formula was changed in the year 2000. It used to be 75% of the first $100, but now it is 75% of the first $200. This means that the maximum tax credit allowed of $500 is now reached at the maximum contribution level of $1075, instead of at $1150.
When explaining the tax credit to people, round numbers are easier to use. The Marijuana Party offers to receive a contribution of $1100, and spend $1000 on the contributor’s choice, while keeping $100 as a fee for the service of registering that choice. (That is easier to explain and to do than to ask for $1075, and spend $975. The contributor contributes a little extra of $25, that they do not have to in order to claim the tax credit maximum. But, since that $25 is all spent on their choice, they do not lose anything. The transaction amounts may even be larger, such as a $1500 contribution to be spent as a whole $1400, yet, with still only the maximum $100 fee.)
S. 127(3.1) The agent has to issue the receipt for the right amount to the right person.
S. 127(4) All registered agents get their identity and powers from the Elections Act. Agents must be electors, i.e. 18 & Canadian, or corporation agents can be incorporated under federal or provincial law, and thus able to enter into contracts in their local area.
S. 127(4.1) Contributions are in cash or in the form of a negotiable instrument.
S. 127(4.2) This is for the rare situation where a partnership has made a contribution.
S. 230.1(1) to (2) is about the registered agent’s duty to keep records and file reports.
S. 230.1(3) makes ss. 230(3) to (8) apply about how and how long to keep records.
S. 238 makes it an offence to fail to comply with ss. 127(3), 127(3.1) or ss. 230 or 230.1.
S. 238 puts the legal duty on the individual registered agent, not on the Chief Agent. The power to sign the receipt and sign the cheque is the duty of an agent, after appointment. According to Elections Act section 415, the Chief Agent is responsible for administering
financial transactions, however, the real enforcement is against the individual registered agent’s operations. An agent that issued fraudulent receipts, or deliberately kept false records, committed an offence punishable by up to a year in jail and/or a $25,000 fine. Everything an agent can legally do is allowed, anything not is punishable by this law.
Income Tax Act Part XX contains Regulation 2000, 2001, and 2002, which are about what information has to be on the receipt, and the report on income tax form T 2092 that the registered agent makes about their official receipts before March 31 of each year. The regulations specify what information must appear upon an acceptable receipt. The agent is responsible for providing the Canadian Customs and Revenue Agency with copies of all the agent’s official receipts. The CCRA treats tax credits routinely, but they could possibly audit to confirm that a taxpayer’s receipt was genuine.
Comments on Irrelevant sections of the Income Tax Act
The s. 127(3) tax credit benefit does not interfere with receiving any other tax benefit.
S. 18(1)(n) stipulates that no other deduction from taxable income is possible for political contributions. Section 127(3) is the only tax benefit available for political contributions.
S. 251 provides a definition of "arm’s length" relationships. This has no application.
S. 248 prohibits double deductions from income. Since the s. 127(3) benefit is a tax credit, and not a deduction from income, s. 248 has no application. Any problem of double deductions never becomes a real issue because s. 248 has no legal relevance.
Common sense does apply that a person can not funnel a charitable donation through a political party, and then also deduct this contribution from their income as a charitable contribution. After their choice is that the party is going to forward the contribution to a registered charity, the party is the donor to that charity. The contributor only gets the official receipt from the political party, and does not get an official receipt from a charity.
Depending on the particular political activities which an agent may become involved in, other special sections of the Income Tax Act might become relevant. Registered agents who become employers would then have to comply with employer’s tax laws. However, these other possible sections would not be relevant to the tax credit itself.
Summary of Comments on the Income Tax Act
The most important income tax law sections are the creation of the tax credit in 127(3) and the duty to issue honest official receipts in 127(3.1). Sections 230 to 230.1 are basic common sense about keeping adequate records about all the transactions. The regulations are merely details about issuing receipts and making reports. Section 238 is the threat of being fined or imprisoned for the deliberate abuse of the agent’s powers.
The general guidelines for taking advantage of the political contribution tax credit say that a choice made by the contributor must be based on a bona fide political purpose, and that a de facto refund of the contribution to the contributor cancels an official receipt. A de facto refund is anything that common sense would say was a straight return of the contribution which was not an expression in good faith of a political purpose through the funding of a particular activity. A refund of the contribution cancels the contribution, and thus cancels the official receipt and cancels the tax credit. (A registered agent is free to refund a contribution, as long as the agent simultaneously cancels the official receipt.)
Section 375 gives the registered party the power to appoint registered agents, and a resolution of the Foundation Congress of the Marijuana Party, passed April 20, 2002, confirmed the Chief Agent has authority and responsibility to choose registered agents.
Division 2, Sections 404 to 414, and Division 3, Sections 415 to 435.
Agents may obtain a contribution from any eligible contributor. (Section 404 has a short list of who is not eligible to be a contributor. Note the contributors have to be Canadian.)
Sections 405(3) and 416 say that only registered agents can receive and spend money on behalf of the political party. The law has deliberately made party financing be public. Sections 410 and 411 establish $50 as the threshold for petty cash, and the ability of the agent to delegate any stated amount of the authority to make petty expenses. Amounts of $50 or above must be documented with an invoice or bill with particulars and proof of payment. Amounts of less than $50 may be documented with a simple statement of why the money was spent, and with some record for proof that this payment was made.
One person can not give money to another person with the condition that they must give that money to a political party. (Section 405 is different than the way the law read back during the time of Longley v. Her Majesty the Queen, when the law did not stop that.)
If the primary political purpose is soliciting monetary contributions, the official receipt can only be for the net amount, after the fair market value of the ticket is deducted from the full ticket price. During an election period, Election Canada requires that such tickets be approved by the Chief Agent. (Section 408 was not explicit back during the time of Longley v. Her Majesty the Queen. This was an administrative guideline back then. Section 408 is an explicit example of a de facto refund not being included in the receipt.)
Sections 417 and 418 require that all bills or invoices must be submitted to a registered agent within three months, and paid within six months since the time it was billed.
Section 424 puts a burden on the Chief Agent to get the approval of the official auditor, and make all the necessary reports to the Chief Electoral Officer. A Chief Agent needs the timely cooperation of registered agents in order to complete this duty. Under the Elections Act, the Chief Agent presents the transactions before the party’s auditor, to prepare for the Chief Agent’s report to the Chief Electoral Officer due at the end of June. Following the electoral law, the registered agent is obliged to organize and present the information regarding the previous year’s activities in the same way as the law requires the Chief Agent to summarize this information and report upon it to the Chief Electoral Officer. Since the law requires the Chief Agent to make a report for the whole party, the Chief Agent must demand from each registered agent what the law has demanded. Subsection 424(2) requires that the contributors be identified by the class of contributor. The Chief Agent needs to have a list of the names, addresses and class of contributors of more than $200. For contributors of $200 or less, the Chief Agent needs to know the total number of contributors in each class. (The most common class will be individuals.)
Subsection 426(3) gives the auditor the right to look at all the books and ask questions.
The law places a duty on registered agents to allow the auditor to do the auditor’s task.
The way that the registered agent allows the auditor to complete the auditor’s task is to send to the Chief Agent all of the necessary documents, and to be prepared to provide any necessary explanation of the documents to the Chief Agent, and thus to the auditor.
The party’s official auditor shall provide the Chief Agent with guidance to help agents in doubt about how to keep the necessary documentation and report the information.
By requiring that the registered agent shall assist the auditor, the law also requires that the registered agent shall assist the Chief Agent to complete the necessary bookkeeping and reporting. A registered agent takes on a legal duty to have their financial affairs audited. The registered agent has a legal duty to provide the Chief Agent with proper documents and reports. The privilege and right a registered agent has taken on must come with their share of the registered party’s responsibility and duty to be audited. A party asks for integrity, competence and loyalty from agents. An agent’s responsibility is to know and obey the law. The party’s legal position respects the law and asserts that it is easy not to break the law if one simply is honest and documents the transactions.
Agents could stop doing their business whenever they want, however, agents must still complete their official reports for everything that they have already done.
(Agents who do nothing still have to report that they did nothing.)
The Chief Agent insists that all agents send the Chief Agent all necessary documents on time! (The Chief Agent has a duty to put polite pressure on agents to insure that.)
Section 433 gives the Chief Electoral Officer discretion to deal with problems that might result from absence, death, illness, or misconduct, of a Chief Agent or registered agent, regarding the making of the reports. This law allows the agents to correct mistakes they make inadvertently or honestly, after they become aware of their errors in their reports.
The Chief Agent has to obey the law, but has no power to enforce the law. The only legal power the Marijuana Party Chief Agent has is to ask the Chief Electoral Officer to deregister an agent, after that agent has shown that they are not reliable to be an agent.
Section 387 gives the Chief Electoral Officer the discretion to suspend a registered party that does not comply with sections 424(1) or 429(1). The word used by the law is "may."
As long as the Chief Agent takes all reasonable steps to comply with the law, the failure of any individual registered agent, due to their absence, death, illness or misconduct, will be understood by the Chief Electoral Officer, and he should not suspend nor deregister.
The Marijuana Party must begin by assuming that individual agents are honest. There is nothing that the Marijuana Party does not want its agents to do which is not already recognized as an offence by the established law. The party can not stop agents from being dishonest in ways that can not be reasonably expected nor prevented. Any error or mistake made by an agent can be corrected and repaired by due diligence, after the error or mistake has been recognized. However, any deliberate error or falsification by an agent is a matter to be resolved by the agent and the law enforcement authorities.
The domain of potential use of the Federal Political Contribution Tax Credit is too great and too important not to attempt to maximize the full use of this incentive. As with the argument regarding the use of all powerful tools, the potential benefit from the proper use of the political tax credit far exceeds the possible harm caused by any abuse.
The contributor does not have to be a member of the party.
The contributor does not have to vote for the party.
The registered agent does not have to be a member of the party.
The registered agent does not have to vote for the party.
The party has given a power to the people, power that they always had but did not use.
The contributor has the legal right to control the way the party spends their contribution.
To make an unconditional gift to a party is merely one of the possible choices available.
A political contribution is an amount of money used to further a political purpose.
A political purpose is something which will bring benefit to the party, or is an intention to influence the government of our country or another country to change a policy or to change a law. Political activities to influence a government include various demands or pressure tactics to embarrass the government or require the government to take a stand on an issue. If activity is controversial, then by that very fact it is political. Any accusation of immorality clearly makes it more political. Political contributions have two legal limits. At one end they may not become de facto refunds, or that cancels the tax credit, while, at the other end, political contributions can not become blatant bribery of government officials. Between those limits, it is a fundamental principle of the law that creativity is legal, since whatever is not prohibited is freely permitted.
Agents make political contracts to register political activities which express political purposes. This arrangement is similar to a commercial contract, except it takes place in the political market place rather than in the ordinary commercial market place. Since the tax credit arrangement is a political contract, according to Lord Brightman‘s mandate theory of political contributions, a contributor could go to court to sue the agent if the agent did not fulfill the political contract that was made when the agent accepted the contribution with its attached choice. (See the Canada Elections Act section 421, that a claim could be against the agent, who is responsible for contracts.)
Generally speaking, the agent is entitled to assume that their contributors and bills of particulars are honest, and the agent may conduct the arrangements on that a priori assumption of honesty. The agent can proceed to deal on trust that their contributors are honest. The agent can accept invoices and bills of particulars at their face value. However, after there is evidence that a contributor or bill of particulars is not honest, then an agent has an obligation to investigate. An agent who discovers reasonable and probable grounds to suspect dishonesty, must then inquire into it further. The agent must not treat a fraudulent bill of particulars as if it were bona fide. The agent can not have wilful blindness to a transaction’s reality. If any contributor’s cheque bounced due to insufficient funds to cover it, then the agent must inform the taxation authorities that the official receipt is no longer valid.
Social Economic Committee Rules
The domain of bona fide political purposes, and the particular political activities that express those purposes, overlaps everything that the government does. The political contribution tax credit interest overlaps all social institutions and the entire economy, which is why this committee on political contributions was called Social Economic.
Party resolution to make tax credits as proven in Longley v. Her Majesty the Queen.
This Marijuana Party Foundation Congress resolution was passed on April 20, 2002, regarding Longley’s loophole, the Contributor’s Choice Concept, (the "CCC"):
"Form an open committee of the Registered Agents to develop the CCC,
to educate the Registered Agents and discuss the limits of the CCC."
Marijuana Party registered agents are members of the Social Economic Committee (SEC). A political purpose of the Committee is education about the limits of the CCC. The Chief Agent is the chair of the SEC, and this book contains the Committee rules. The Committee rule book will be improved as the Committee develops the CCC use. The political purpose of the rules is to allow the maximum participation within the law. The Chief Agent intends that the SEC will evolve conventions to govern itself, and that gradually registered power may be transferred from the Chief Agent to the SEC. The Chief Agent is the party officer responsible for managing a party’s finances in accordance with the Canada Elections Act. (The Chief Agent can be a corporation.)
The goal of the party is to have more people participate in the political process.
Full use of the tax credit is based on respecting that every taxpayer has an individual dignity which deserves their own political priority to be recognized and registered.
The tax credit scheme gives all contributors direct participation in party policies. The party has only one official policy in addition to ending the prohibition of pot, and that is to amend Canada’s Electoral Act to allow for more proportional representation in Parliament. Each registered agent is entitled to their use of the party name and logo. Party principles include respecting deliberate decentralization and distribution of power. Persons are permitted to express dissent. Agents are free to express political opinions.
Duties and Freedoms of the Individual Registered Agent
The main job of the agent is to inform taxpayers about their legal rights to participate, and to complete all of the necessary paperwork in order to register their political acts. Within the deal agreed to by the registered agent and Chief Agent, as recorded in this book of Committee rules, the registered agent has an independence to operate in any legal way. (This independence may be subject to the future resolutions of the SEC.)
Duties of the Individual Registered Agent to the Chief Agent
By May 1, each year, the individual agent must forward all the necessary documents, accounts and summaries of the previous year to the Chief Agent, keeping a copy for the agent’s records. (The agents have to keep their official documents for two years.)
OFFICIAL RECEIPTS and BOOKKEEPING REQUIREMENTS
The official receipts that meet the requirements of Regulation 2000 have an original and two copies, and then a third copy made of one of the copies. The original of the official receipt is given to the contributor. The first copy must be sent to the Canada Customs and Revenue Agency. The second copy must be sent to the Chief Agent. The local agent will make their third copy from this second copy to keep for the local agent’s own records. (Two carbon copies are faint enough, three often are too faint.) When an agent receives a contribution, the agent issues a receipt to the contributor. This receipt must have all of the information required by Regulation 2000: the name and signature of the agent, the name of the party, the serial number of the receipt, the date of the contribution, the local area where the receipt was issued, the name and address of the contributor, and if the contributor is a numbered company, then the name of the president of that company. Elections Act s. 424 requires that the agent only has to be able to identify the class of contributors of $200 or less. The agent only has to issue an official receipt for more than $200, (for at least doing bookkeeping). The registered agent should take reasonable precautions to insure that the name of any contributor of $200 or less is kept confidential, and only released in confidence. Apart from copies of any official receipts for $200 or less which may be filed with the Canada Customs and Revenue Agency (which has a duty to keep them confidential) there is no one else who needs to know the name of a contributor of $200 or less.
(Anonymous contributions of $200 or less are allowed but obviously they cannot have official receipts.) The name of a contributor of more than $200 must be made public, which must generate a receipt for bookkeeping and perhaps for income tax purposes.
An agent may replace a contributor’s lost receipt, however, that must be reported. An agent can issue one receipt at the end of the year to total the contributor’s donations. The agent may issue a receipt for a contribution that was received the previous year.
The Chief Agent will provide generic official receipt forms to the registered agents. An agent could create and print their own receipt forms that comply with Regulation 2000, with the name of that agent printed on the receipt. An agent’s computer could create official receipts and do bookkeeping. The agent may use the official receipt specimens (either electronic or print) provided by the Chief Agent to get their receipts printed locally. (If necessary, an agent could use temporary receipts, to record the information to put later on a proper receipt, or to be forwarded to the Chief Agent, who will enter that information into to the computer, and have it print out the official receipt, which will be sent back to the registered agent to sign and issue to the contributor.)
The basic tax credit scheme requires simple bookkeeping and the standard tax forms:
a contributor gives cash or a cheque, or otherwise provides a contribution to an agent; the agent issues a complete official receipt to a contributor for the amount contributed; the agent writes a cheque or otherwise pays for the activity that was chosen; (& finally, the contributor attaches their official receipt to their income tax form to claim the credit.)
Bookkeeping is a record about the money that went in and the money that went out. To repeat, the bookkeeping has to be able to keep track of where the money came from, and where it went. There has to be an explanation and documentation for each bit of money that comes in and then goes out. The paper or electronic trail of the transactions track each payment to the invoice or voucher which explains a payment.
It is not strictly necessary for registered agents to open any special bank account to keep track of their registered transactions, but it would usually be convenient to do so.
(The law requires a candidate’s official agent to open a bank account, if their election campaign spends any money. However, the law says nothing about the registered agents being required to use a financial institution to channel all their activity through.)
What the law says about agents keeping records is what the agent has a duty to fulfill.
Income Tax Act section 230.1(1) states:
"Every registered agent … shall keep records and books of account sufficient to enable the amounts contributed that are received by the agent and expenditures that are made by the agent to be verified (including duplicates of all receipts for amounts contributed, containing prescribed information and signed by the agent) … at the agent’s address recorded in the registry maintained by the Chief Electoral Officer."
Canada Elections Act section 410 states:
"... where an expense of $50 or more was incurred … the registered agent … must keep a copy of the invoice prepared by the person who provided the good or service to which the expense relates together with proof of payment.
… where an expense of less than $50 was incurred … the person who made the payment must keep a record of the nature of the expense together with proof that it was paid."
The Canada Customs and Revenue Agency publication on keeping records, IC78-10R3, notes the legislation does not specify exactly what records and books have to be kept. Records and books of account are enough to permit verification of all political donations received for which a tax credit is available; supported by source documents that verify the information in these records and books of account. A "source document" includes sales invoices, purchase invoices, cash register receipts, written contracts, credit card receipts, delivery slips, deposit slips, work orders, dockets, cheques, bank statements, tax returns, and other correspondence. A "record" includes an account, an agreement, a book, a chart or table, a diagram, a form, an image, an invoice, a letter, a map, a memorandum, a plan, a return, a statement, a telegram, a voucher, and any other thing containing information, whether in writing or in any other form. A "voucher" can be a piece of paper that is a record of money paid. The registered agent can create their own vouchers, which have enough bits of information to allow verification of that information, in the sense that then this transaction could be tracked back, if someone wanted to. Reasonable proof of payment depends upon the nature of the payment. An honest record can be the agent’s own record, as long as it has enough information to make verification possible. Recording the details regarding documentation of contributions is done by use of the required official receipts. For expenditures, the agent must keep the details, by making themselves a voucher for their payments about what was paid for.
The agent needs either a voucher for the gift or grant, or the agent must keep a copy of the invoice or a particular bill that was related to their payment, along with proof of their payment. Proof of payment can be documented in ways such as by a cheque, or credit card payment, etc., or with a receipt from the person to whom the payment was made, where that receipt has information about why that particular payment was made.
Obviously, these records need to be organized in some way that connects related ones. Bookkeeping should solve these problems in as practical a way as possible at the time. The registered agent can begin with a simple book with pencil notations of the flow of money into and out of the agent’s domain of registration. The agent could develop some system of electronic accounting and data base reporting, as they needed to do so.
For the purposes of subsection 230.1(3) of the Income Tax Act, with respect to the application of paragraph 230(4)(a) of the Act, the retention period for records and books of account that are required to be kept pursuant to section 230.1 of the Act is prescribed to be the period ending on the day that is two years after the end of the last calendar year to which the records or books of account relate. (I.e. 2002 records kept until 2005.)
POSSIBLY OPENING A REGISTERED AGENT’S BANK ACCOUNT
A registered agent may open account(s) at any financial institution(s) through which their transactions are conducted. The proper legal name of these banking accounts is
"[NAME OF THE REGISTERED AGENT] IN TRUST FOR THE MARIJUANA PARTY"
According to a 1985 Elections Canada letter to Longley, the registered agent can open a joint bank account with other persons, where all have to sign to release the funds. This means the contributor does not have to trust the agent as much, especially if a bigger project involving many contributors were to be undertaken. This is one way in which the contributor can exercise their power as the principal to ensure fiduciary trustworthiness. (As the principal, the contributor could insist on any set of safeguards that they wanted.)
CONTRACT BETWEEN THE REGISTERED AGENT AND THE CHIEF AGENT
The contract between the Chief Agent and a registered agent includes sharing of the benefit that the party obtains. If the contributor chooses to make an unconditional gift to the party (which includes a membership donation), then the agent will retain 60% of that gift amount, and forward 40% of that gift to the Chief Agent at the Head Office. When the contributor directs the use of the funds, the deal is that the agent will retain 60% of the party’s fee for registering the activity, and forward 40% of the party’s fee to the Chief Agent at the Head Office. In general, the usual fee to register the political purpose will be 10% of the amount that is spent according to the directions given by the contributor. But, the maximum party fee is $100 (not $107.50 nor $110). The Head Office minimum fee is $20. The local agent may waive their part of the fee for making tax credits, but the agent must forward a $20 minimum fee to the Head Office.
Individual Registered Agent Independence
Full tax credit use is for an agent to permit any contributor to register any choice, as long as that choice is not to do something illegal. Common sense about the common law should tell anyone whether the choice would violate the criminal code or statutes. However, some interesting tax credits might be in dispute. The agent and contributors should make as sure as possible that they are right and will be able to prove that. At a minimum, they have to do good bookkeeping and complete the proper reports for the government. Of course, it is plainly obvious that the agent has to obey the law by keeping their records, and by sending their reports on to the Canada Customs and Revenue Agency, and to the Chief Agent, but within that the agents have total liberty.
Promoting the tax credit opportunity by persons who are not agents
According to each individual agent’s situation, the agent may pay part of the agent’s share of the political registration fee to someone who has done work to encourage the contribution. The proportion of the fee that is used to pay a commission for promoting the political contribution tax credit opportunity is up to the local agent to decide, depending upon the local circumstances. An agent is free to negotiate any subsidiary deal with any third party which still stays within that agent’s deal with the Chief Agent.
There is a political contribution tax credit in all the other jurisdictions in Canada. The Federal potential is about $7.5 billion per year, which is roughly doubled by other jurisdictions to $15 billion per year in total tax credits that theoretically can be claimed. The provincial, or a territorial, use of the tax credit would fall within the same analysis, whatever the particular provisions in the provincial legislation. All political contribution arrangements take place within Lord Brightman’s mandate theory, which always is the correct legal view of political contributions. Each province has unique laws, (and some limit the use of the tax credit), and each provincial political party is a separate entity, however, the Marijuana Party is willing to work with provincial parties that are offering this tax credit opportunity to Canadians. Our agents may also act for other parties.
The Marijuana Party shares both people and office space with the Bloc Pot in Québec, and the Bloc Pot official representatives will also be Marijuana Party registered agents. However, the situation right now is uncertain with respect to other parties or jurisdictions. Success in development of political contribution tax credit potential where it now can be fully utilized would provide the means to able to expand into other jurisdictions. The Marijuana Party is willing to working with political parties in jurisdictions that provide tax credits, in order to provide taxpayers with opportunities to conveniently register all their political choices. More democratic participation should be encouraged on every level. The same persons should be able to register all levels of their political purposes.
The Marijuana Party has adopted a two year long process to draft and adopt a set of by-laws that will serve as the constitution of the party. (At the present time, the party has no constitution and is only governed by the Canadian legislation, with nothing else but the few resolutions that were passed at the Foundation Congress, April 20–21, 2002.) The legislation is expected to be changed, and we will have to watch for that possibility. Since Marijuana Party registered agents form the Social Economic Committee (SEC), of course, the Marijuana Party SEC will be interested in the drafting of party by-laws. Two main things which registered political parties do are raise money to publicly promote the interests of the party to the government, and endorse candidates during an election. Canada Elections Act subsection 383(2) says that the power to endorse candidates can be delegated. It could be delegated to designated agents in each electoral district.
PAYMENT FOR GOODS & SERVICES OR THE GIVING OF GIFTS & GRANTS
A contributor’s choice is to direct money to purchase goods or services or to be a gift.
Paragraph 14 of Longley v. Her Majesty the Queen was about making "Rhino Bursaries" which were the first and foremost of actual transactions done in the past. These bursaries are both a gift and a payment for service, in this case a payment for being able to attend post-secondary education service. Contributors can nominate anyone, including themselves, to become the beneficiary of the bursary. Because of the strength of this political purpose, the bursary takes the form of a cheque to the contributor, or another person chosen by the contributor, for 90% of the value of their contribution. (Simple formula: to receive a particular bursary, donate 1.1 times that.) The Canada Customs and Revenue Agency Web site has their Information Circulars and Interpretation Bulletins available. (See http://www.ccra-adrc.gc.ca/menu-e.html) Their IT-75R3 relies upon subsection 200(2) of the Regulations to require the payer of a bursary of more than $500 to report that amount on an information return (T4A slip). The agent needs the social insurance number of the beneficiary of the bursary to complete the T4A slip. (Marijuana Party’s CCRA business number is 867 767 915.) Regulation 205 requires the agent has to send the beneficiary and the CCRA their original and copy of the T4A before the last day of February. Regulation 205.1 says agents creating more than 500 bursaries, would be obliged to file the T4A in an electronic format. (See their publication RC4157(E) Rev.01, about filing T4A slips and T4A Summary.) (Only Québec requires a separate, second slip to report bursaries. See http://www.revenu.gouv.qc.ca/eng/formulaires/rl/rl-1_g-v.asp: the "Relevé 1" slip.)
The Canada Customs and Revenue Agency point out in Students and Income Tax, and the General Tax Guide, that if the beneficiary of the bursary could claim the education amount deductions, then they only have to add the bursary to their income if they got more than $3000 in total bursaries and scholarships, i.e. if all the box 28 amounts in all their T4As added up to more than $3000. (In Québec a bursary is also deductible.) If the beneficiary of the bursary can not claim the other education amount deductions, then they must add the bursary to their income if it was above $500. See http://www.ccra-adrc.gc.ca/eservices/iis/slips/t4a/22023a-e.html& Québec’s site too.
PAYMENT FOR GOODS AND SERVICES
See Longley v. Her Majesty the Queen, in paragraphs 11 & 12, regarding payments.
In the case of the contributor choosing a bicycle, the agent is paying for that good to be bought for the person chosen by the contributor, who may even be the contributor. The ownership of the item, and any legal benefits attached to that item, belongs to the person that was chosen to be given that item. The agent retains a copy of the invoice or particular bill of sale for the good that they bought for the person chosen, which invoice will have been issued in the name of the person chosen, with some proof of payment of that bill by the agent. Bona fide political purposes allow the agent to buy a bicycle for anyone. Bona fide purposes cover many goods, such as computers, or similar equipment, that some person needs to make a living in the modern world, or to recuperate from doing so. The invoice for the good that was bought, along with some proof of payment by the agent for that invoice, is enough to document the transaction. This series of transactions arrangement is that (1) the agent receives a contribution with conditions that it be used in the chosen way, then (2) the agent issues the official receipt for the amount contributed, and then (3) the agent pays for the good that was chosen by the contributor to be given to the person chosen by the contributor.
TRANSPORTATION PAYMENTS; e.g. METRO OR BUS PASSES, etc.
Any form of transportation could be paid for, depending on the contributor’s choice, from a bicycle to an airline ticket. The choice is free, it only needs to be recorded.
Doing this would depend on the way that the local transportation works. (In Montreal, people can buy metro passes through the mail. Therefore, it is easy for an agent there to set up a monthly routine to send a cheque to buy the contributor their pass.)
Those who sell hemp products in Canada have a bona fide political purpose in forcing the government to subsidize their industry with political contribution tax credits. Since the hemp industry was suppressed by the marijuana laws, the people who produce or purchase those products are entitled to use the political contribution tax credit to attempt to rectify the effects of almost eight decades of injustice and oppression.
Paragraph 12 in Longley v. Her Majesty the Queen was about practical job creation. The work directed by the contributor may be of public benefit, or the work may be of benefit to the contributor, or may benefit another person the contributor has nominated. A taxpayer makes a contribution to a registered party, which results in the contributor having their chosen job end up being subsidized by the political contribution tax credit. (All government job creation programs really boil down to employer subsidizations.) The contributor may direct, in as general or particular way as the agent will agree to, what work will be paid for by the agent. Payment must only be made for real work done or for material and tools accounted for at a fair market rate. The contributor may be required to endorse the bill of particulars served upon the agent by the worker(s) or contractor. It may be easier, from the agent’s point of view, not to become the employer, although that is possible, because becoming an employer requires more paperwork. A successful agent could learn to become the employer, and do that paperwork. But, the agent might usually prefer to operate through contracts, or to make block grants to other groups who will be responsible for becoming the employer or contractor. For instance, if there is some community group working on a project, they could organize to all contribute to the agent, with the understanding that the registered agent was going to give 90% of all the contributions as a block grant to the community group. Then that group would be responsible for spending their money on their project, and doing all their own paperwork.
COMMUNITY AND REGIONAL DEVELOPMENT
There are a large number of worthwhile community development projects throughout the country that have a bona fide political purpose, either for profit or not for profit. Any individual and/or group can contribute with their choice be to assist a community project. For instance, the neighbours of a local park could join together to contribute through a registered agent in order to obtain tax relief for their project. By using the tax credit, the taxpayers can effectively force the government to spend more money the way that the taxpayers wish that the government would. There is a significant regional advantage to any local area that participates, since that area is effectively bringing back from Ottawa dollars that would have otherwise left their community. (The local agents who are the most successful are bringing back the most tax money to their local community area.)
All of the goods and services that conserve or recycle our resources deserve support. There is an overwhelming bona fide political purpose in attempting to change towards a sustainable economy and stopping the destruction of the natural world. Uses of the political contribution tax credit to further these political purposes would be good ideas. Good working alternatives could be implemented with critical and creative tax credits.
The political contribution tax credit is between the logging and investment tax credits in the Income Tax Act. What the logging tax credit does is subsidize logging, while the various investment tax credits and deductions over the years have subsidized a wide variety of economic activities that past government policy wanted to promote. The tax credit scheme is flexible. It can be adapted to any possible business plan to bring in the tax credit benefit that may make the difference between a marginal plan and a viable plan. The agent and the contributor are making a judgment about which kinds of economic activity should be stimulated and encouraged by the tax credit use. For instance, suppose it was viable to build a windmill for generating electricity in a particular location. The agent could build his or her ability as a person who can issue official receipts into the business plan that was going to create the organization to purchase, install and operate the windmill. Perhaps the agent could explain it as a way for contributors to subsidize their electricity bill in the future. If the windmill cost three million dollars to purchase and install, then perhaps three thousand contributors could join together in a business plan to make that happen, or 1500 over 2 years, etc. The thing the tax credit does is offer a significant after-tax benefit from going ahead with a good project. The tax credit can not turn a bad project into a good project. However, it can help a good project become an operational reality. It would be up to the registered agent and the contributors to agree upon the overall business plan that included the special opportunity of a political contract within that business plan to deliver the annual political contribution tax credit into the consideration of that plan. The final project would become a separate legal entity, no longer dependent upon the Marijuana Party. When completed, any such project would be owned as was agreed it would be in the original business plan developed by the agent and the contributors. Perhaps the windmill could end up being owned by a corporation whose shareholders would be the contributors and the agent. Their percentage of ownership is whatever the proportions that they agreed upon was fair. (All of the political parties that have acknowledged the fight to prove the truth about the political contribution tax credit have agreed to pay to Blair T. Longley 1% of the amount that the party as a whole spends on choices. In keeping with the view that this grandfather clause was just and fair, agents who use the tax credit to develop enduring business potential may give Longley a 1% share in the ownership of any business that started with the tax credit.)
Ironic application of the tax credit would be to pay the fee that professionals charge ordinary people to complete their income tax forms, and thus protest that complexity. Indeed, tax professionals should fully inform their clients about the political tax credit. The credit could be used to pay the fees of any similar professional, such as a lawyer.
The credit can be used to protest by payment of fines or fees imposed on taxpayers.
The estate of the deceased could benefit from a tax credit. A contributor may prepay for their funeral, or otherwise include some political contribution directions in their will.
Child care grants are simple gifts made from the financial contribution to the agent. Coping with all the costs of child care is quite obviously a bona fide political purpose. There is no need to report to the taxation authority on the delivery of a grant for child care, i.e. no T4A form. Child care grants would not be earned income, but a gift with a good political purpose. These grants should be paid to the child nominated by the contributor. The child’s legal guardians can execute the grant as a benefit to the child. A taxpayer concerned for children believes looking after them properly is the highest priority. A grant to a child assists taxpayers in doing whatever the taxpayers thought was in a child’s best interest, by providing particular child care grants for the purpose.
The tax credit can be used to effectively subsidize the allowance given to our youth. Paragraph 15 of Longley v. Her Majesty the Queen about "Canadian Youth Civil Rights Disability Compensation Grants" could also be called Youth Suffrage Grants. Since people who were under the age of 18 during an election were denied their right to vote on the basis of their youth, the tax credit scheme may be used to protest that.
GIFTS TO NON-PROFIT ASSOCIATIONS
Paragraphs 9 and 10 of Longley v. Her Majesty the Queen recognized gifts where the agent acts a conduit to channel funds contributed to a political party on to a non-profit society or a registered charity chosen by the contributor. (The judge did not agree with Revenue Canada’s position, as that was summarized in paragraph 33.) The political purposes expressed in gifts directed to other organizations through the political party are both the stated purposes of the particular organization, as well as a protest that political parties enjoy a greater tax subsidy that other organized groups. The political contribution tax credit for amounts less than $200 is many times better than the tax benefit for the same amount of charitable contribution. (Only with a much bigger contribution does the tax benefit from registered charity exceed the tax benefit from giving to a registered political party.) Any group with a bank account goes from having no tax benefit to offer, to being able to offer the political contribution tax credit (minus the party’s fee for registering these transactions) if they inform their interested donors to give money to the party, with the direction that 90% of that money will be forwarded by the agent to their treasurer to be used for their purposes by that group.
Tax credits for medical marijuana are offered to Canadian compassion clubs by the Marijuana Party to help alleviate the financial burden of buying medication presently not recognized by health care funding. Upon receipt of a donation, the Marijuana Party agent issues payment to the Compassion Club for purchase of medical marijuana, supplies, vaporisers and so forth. We suggest friends or family can assist by donating in their own name and thus be eligible for the tax credit while helping pay for their loved ones’ medicine. (By association, the club only supports the idea of legalizing their pot.)
Medical care costs and the insurance premiums are clearly political. Health care costs could be offset with the tax credit. Some worthwhile alternative medical practices do not fall under our government health care umbrella, especially for extended care. With an emphasis on either prevention or treatment, the contributor could choose to have the registered agent pay for goods or services such as vitamins or acupuncture.
AMATEUR SPORT AND FITNESS FUNDING
The tax credit can raise funds for amateur sports or other physical fitness activities. The costs of equipment, training, facilities or transportation may stop people from enjoying a better quality of life. The agent could either pay for a particular person’s enrolment fees, or the agent could work with an interested sports association to collect contributions which would be paid to that association as a block grant.
The tax credit could be used to provide tax relief from having to come up with first and last month’s rent. The agent could use the contributed funds to help pay for housing in the manner chosen by the contributor, such as a cheque to the landlord, which could be documented with a copy of the landlord’s receipt for the agent’s payment.
For homeowners, the tax credit scheme could be used to pay municipal taxes.
Arts groups could use the tax credit to subsidize the production of their performances. The promotion of culture could include such things as paying for music lessons. Since goods or services include arts, crafts and performances, the contributor, or someone nominated by the contributor, can direct the enjoyment of the benefit of those things. As always, as long as there is a bona fide political purpose behind particular political activity, then the agent is free to make a gift of any good or any service to be given or delivered as was chosen originally according to the contributor’s political purpose.
THERE ARE MANY POSSIBLE EXAMPLES
Use of the tax credit results in the generation of a $500 public opinion poll of taxpayers. The more people participate, the greater the amount of information used in the process. What these examples of tax credit use do is illustrate some contributor’s choices. Once the contributor learns the legal truth, and understands the guidelines of the law, then the contributor can use their creativity to make any choice that is within the law. The ideal of participatory democracy is to permit a greater use of information to govern public policy.
TAXPAYERS COULD BECOME THEIR OWN REGISTERED AGENT
This is a way for the taxpayer to keep more direct control over their own contribution. This solves a potential problem that some taxpayers may not trust any another agent.
A taxpayer who became an agent could take advantage of their opportunity to register political activity. (This example can provide a review of the duties of agents.) In this special case of a taxpayer who became their own registered agent, then the fee that the taxpayer paid to the Chief Agent would only be $40, while the rest of the net $460 tax credit benefit would go to the taxpayer. This differs from the situation where the taxpayer relies on somebody else to be their registered agent of the Marijuana Party, because the normal full fee is $100, of which $60 is kept by the local registered agent, while $40 is forwarded to the Chief Agent at the Head Office of the party. In the example of the taxpayer who was their own registered agent, then they get to keep that $60 fee to cover their expenses to operate as their own agent, plus they get the full $400 of net tax credit benefit, which every other taxpayer could similarly enjoy. The main benefit is that the taxpayer who becomes an agent does not have to trust anyone else with their full contribution amount. Another benefit is that, once the taxpayer has become a registered agent, then they have the power to do the same deal as other agents for any of their friends or family members with taxable incomes.
It would cost the taxpayer who became a registered agent $40 each year to do this. This is the same as the $40 requested from by the Chief Agent from all the taxpayers.
The Chief Agent may ask for pre-payment of the $40 fee, to show a serious intention.
(The registered agent powers are effectively free for anyone who is not a taxpayer, since being a registered agent for them is to work at it like a job for a commission. These powers are potentially profitable to anyone able to act as an agent for others.)
The logic of participation in the tax credit scheme is impeccable. The party making a taxpayer become their own agent merely reveals more starkly that logical argument. It is quite consistent with the ideals behind the tax credit to increase participation in the funding of the political process by increasing the number of agents able to do it. While the vast majority of taxpayers will continue to automatically assume that it is better for them not to bother to participate in the funding of the political process, the Marijuana Party can only counter that by making their offer better for the taxpayer. Instead of participation in the tax credit by making their full contribution to someone else, taxpayer participation involves sending a contribution of $40 to the Chief Agent, with their request to become a registered agent in order to participate more directly. In order for any taxpayer to become a registered agent of a registered political party, the only thing necessary is for the Chief Agent to write a letter to that taxpayer which appoints them to that position, and then the Chief Agent informs the Chief Electoral Officer of that appointment within 30 days. (Of course, the Chief Agent has discretion to refuse to accept a contribution, and not appoint a person. The Chief Agent always has the power to ask the Chief Electoral Officer to deregister any agent at any time.)
It is not necessary for a registered agent who is only going to do simple registered political activity to open a special bank account for those transactions. Instead, what effectively happens is that the taxpayer takes on a different role as their own agent. The taxpayer designates some of their own money to become an amount contributed.
After the money is designated as an amount contributed, it rightly generates a receipt.
(The taxpayer, as a taxpayer, can use their Marijuana Party official receipt, which the taxpayer, acting as their own registered agent, has filled in completely and signed.)
The taxpayer, acting as their own agent, spends the money they contributed in the manner that they have chosen as the contributor. A taxpayer, acting as a registered agent, decides how to spend the funds that they have contributed. By going through the steps of the registration process, a taxpayer has also acted on behalf of the party.
The taxpayer spends their own money in the way that they documented and reported. The English language phrase that is often used to describe this kind of change in official position is "switching hats." The taxpayer and the registered agent before and under the law are very different persons, even though in the real world they seem to be the same. Understanding this is to understand the essential nature of the whole transaction, which is that it registers the funding of political activities, and therefore qualifies for the political contribution tax credit. The taxpayer simply indicates that some of their own money is now a political contribution amount, and then they spend that money in a documented way and finally make the necessary reports back to the Canada Customs and Revenue Agency, and to the Chief Agent of the Marijuana Party, in order that the Chief Agent can have the bookkeeping audited, and make the yearly report on the Marijuana Party’s activities to the Chief Electoral Officer. Anyone with a high school level of ability could readily do a registered agent’s job. It is easier to be a registered agent than it is for an ordinary taxpayer to complete their tax return.
At the time that the taxpayer who wants to become their own registered agent makes their initial $40 contribution to the Chief Agent, with their request to become appointed as a registered agent of the Marijuana Party, the taxpayer could indicate which kind of information package they wanted, depending upon what sort of political activity they planned to execute. Taxpayers who become a registered agents have the incentive of personal profit to learn how to participate in the funding of the political process. After taxpayers learned about the opportunity, they could inform other people about it. Their registered agent power is then available to do it for anyone else that wants to.
Time line Check List for a taxpayer/agent to register for themselves:
A taxpayer may write to the Chief Agent, to send a $40 contribution, and to ask to be appointed as a registered agent. The taxpayer’s letter would indicate that they were going to use the tax credit to make a bursary for themselves. Of course, they could indicate any other possible choice, such as outlined in this list of tax credit examples. The Chief Agent writes back to the taxpayer to appoint the taxpayer to be an agent, and within a month the Chief Agent sends a copy to the Chief Electoral Officer. (The taxpayer receives a receipt for $40 from the Chief Agent, which is good for tax credit.)
The taxpayer designates that some of their own money is now a political contribution. They simply set aside that amount of money in their own bank account or cash flow. That money is then an amount contributed, and the taxpayer completely fills in and signs the blank official receipt form which they had gotten from the Chief Agent (or which they could have gotten instructions on how to produce this official receipt from the Chief Agent, or from reading the relevant law and regulations for themselves). The taxpayer writes a cheque or otherwise makes a properly documented payment. With most choices, a simple voucher or a bill with proof of payment would be enough documentation to forward to the Chief Agent. There is nothing else an agent would need to do except claim their tax credit when they filed their annual income tax return. The exact amount they contribute and spend depends upon them and their purposes.
Using the tax credit in most examples would simply skip all the T4A steps, since that is not necessary. For instance, the registered agent could designate some of their funds to become a political contribution, and then use the funds to purchase a bicycle. A copy of the invoice for that bicycle, and a record that the agent paid for that bicycle, would be the only documents necessary to register that particular activity, and hence those would be among the documents necessary to be forwarded to the Chief Agent.
In the particular case of creating a bursary, the information package, or self-made kit, would include copies of the necessary T4A forms, (plus redundant information on how to obtain these necessary forms from the Canada Customs and Revenue Agency), since one who becomes the payer of a bursary worth more than $500 has to report it. After making a "do-it-yourself" bursary: before February 28, of the year after the transaction, the agent must complete a CCRA T4A slip and send that T4A slip to a beneficiary of a bursary. To complete the T4A slip, the agent needs to know the social insurance number of the beneficiary of the bursary, and that the Marijuana Party’s Canada Customs and Revenue Agency business number is 867 767 915. The agent also has to complete the T4A Summary form and submit that to the CCRA.
(In the province of Québec, since there is a separate income tax system, the agent would also have to complete a report on issuing a bursary, even although it makes a bureaucratic circle where it is reported, added to income, then deducted from income. The Québec RL-1 slips and Summary RLZ-1.S-V must be delivered by February 28. That information is relevant only in Québec: see http://www.revenu.gouv.qc.ca/eng/ The Marijuana Party has no business identification number within Québec’s system.)
Before March 31, of the year after the registered transactions, agents must complete a CCRA T 2092 form, to which they attach a copy of their official receipt(s), and then mail that package to the Canada Customs and Revenue Agency.
(Before April 30, of the year after the registered agent transactions, the agent will, the same as any ordinary taxpayer who files, attach their official receipt to the annual T1 tax form in order to calculate and claim their Canadian political contribution tax credit.)
Before May 1, of the year after the registered transactions, the agent must send to the Chief Agent at the Head Office of the Marijuana Party, a summary of their activities, including a copy of their official receipt(s), and the record of what they paid for, with proof of that payment. They should include a copy of the T 2092 form, and include a copy of any T4A slip or summary form. Practically speaking, they make a copy of all the documents and records which are relevant to their registered agent activities and send that copy to the Chief Agent. An individual registered agent could clear away their necessary paperwork during January. There only are a few simple forms to fill in.
Persons who already know how, could do all paperwork in less than twenty minutes. It is well worth the time to find out how to do the paperwork, in order to be able to benefit from being a registered agent, since any individual taxpayer who becomes a registered agent and participates obtains a direct after-tax personal profit of $460.
A taxpayer could continue to participate in the next year, or the years after that, and claim another $500, year after year. They would forward $40 to the Head Office each time that they completed a transaction for themselves, the same as all agents would.
After a taxpayer has become a registered agent, then they can offer the opportunity to other taxpayers on the same basis as other agents. The taxpayer could consider that by being able to do this for themselves, then they would also be able to do it for their friends, family members, fellow workers, and as much of the public as possible.
For their friends and family members, the taxpayer would be doing them the favour of giving them a net after-tax profit of at least $400 from participation. The taxpayer who became an agent could also make a little profit from arranging transactions with any acquaintances with taxable incomes. The whole of Canadian democracy would profit favourably from more participation. Our democracy will become much more vigorous.
Considering how much of their money people pay in taxes, people spend very little money supervising how their tax money is going to be spent. People maybe can vote once every four years, but that is really the only control they have over their taxes. Expanded use of the tax credit could lead towards greater control of the government budget by taxpayers. The political market place is at least a hundred times larger than the tiny area that is occupied by all the established political parties. The law allows corporations to both be contributors and registered agents. Political funding could be a bigger business. The way to develop that business must begin on a smaller scale.
The taxpayers who become their own agent get to create their own home business, able to operate by making political contracts in their expanded political market place.
Home based registered political activity provides minimal units of political organization necessary to build an organization that can become better than the government. The long-term hope would be to encourage enough participation in the political process in order to stop it being dominated by a tiny minority, then to change the very bad laws that have been enacted in the past because of corrupt funding of the political process.
The use of the tax credit was intended to be a fund-raising device and to encourage more participation. The tax credit incentive was designed to allow candidates and political parties who were not wealthy to nevertheless participate more effectively.
TAX CREDITS DURING AN ELECTION
Special rules apply during an election that do not apply between elections.
Below is an illustration of the type of Bill of Particulars that the agent of a candidate or a party should get the contributor and campaigner(s) to complete and submit for payment:
Election [year] Marijuana Party [candidate] Campaign
I, the undersigned, a contributor to [candidate’s or party’s name], of the contribution amount ______, and/or my campaigner(s) ___________________ hereby bill [candidate’s official agent or party’s registered agent] for a campaign promoting or opposing, directly and during the election between [date] and [date] inclusive, a registered party, or a candidate, in the following way of my choice:
This campaigning, at a fair market value, according to currently reasonable estimates, as performed by myself, and/or my campaigner(s), is worth _______.
I, the undersigned, further declare neither I, nor my campaigner(s), have, during the election, directly or indirectly, offered, procured or provided or promised to procure or provide money, valuable consideration, office, employment, food, drink, or smoke, to induce any person to vote or refrain from voting.
If I, and/or my campaigner(s), have spent any money or provided any goods worth more than $200 while campaigning, then the amount of that money or the commercial value of those goods is included in the total of this bill of particulars.
I confirm that I, and my campaigner(s), have campaigned in good faith and that to participate was the primary purpose.
[date] Original Signed by the Contributor,
and endorsed by actual campaigner(s).
Contributor’s choice campaigning is self-rewarding, since tax credits allow ordinary taxpayers to pay themselves to be talking with each other as professional politicians. To illustrate what is possible with this campaigning, a $200 contribution will yield a $150 tax credit, and the contributor may choose to bill the agent an additional $150. They earn this ordinary income by campaigning in the way of their choice. Thus, the contributor can earn a modest after-tax $50 profit from actually participating in the election in whatever way that they wanted to. The commercial value of any goods or services worth more than $200, provided during the campaign, is a contribution to be included in the candidate’s or party’s reports. A contributor to a candidate or a party can be paid by the agent to provide goods or services. A contributor can provide the funds which pay them to provide these goods or services. A contributor can, with the agent’s agreement, direct which particular goods or services are provided to the campaign. The condition is that an agent ought to act like a "reasonable consumer" which means that the agent ought to only pay for real goods or services provided by contributors, and pay at a fair market rate. The contributor can choose to delegate the campaigning work, then the campaigner(s) also fill in and sign the bill of particulars. The arrangement could be set up with either a verbal or a written contract between the agent, the contributor and the actual campaign worker(s).
During an election period, registered agents should suspend all other kinds of registered activities to allow for participation in the election. Registered agents who choose to become involved should focus solely upon the election campaign. Agents not involved in the election campaign should maintain a moratorium. Telling taxpayers about their tax credit opportunity could be part of the campaign. However, the tax credit should not be employed for any other purpose than to fund election expenses during the election. Total election expenses are limited, but non-election expenses are not limited. Unlimited non-election expenses can become much bigger. The limits are indexed to inflation, however, a registered party can spend no more than about $13,000,000. ($13,000,000 during an election could be $200 from 65,000 contributors. However, in perspective, the full tax credit potential between elections, when 15,000,000 taxpayers could participate, is orders of magnitude greater than the total possible tax credit potential that could be realized during an election period.)
Profit from Protesting the Prohibition of Pot
All taxpayers should participate in protesting the prohibition of pot, because that wastes tax money, while legalization would increase government revenue. The government spends at least a million dollars a day to enforce the pot prohibition. More than half of Canadians tell opinion polls they are in favour of legal marijuana. The 10% fee to the Marijuana Party supports potential public benefit that would follow from legalization of Cannabis. Taxpayers who have no interest in pot products should still be interested in obtaining a personal profit from participating in registered dissent.
The political contribution tax credit enshrined the ideals of a free and democratic society.
Authoritative statements about the ideals in the tax credit purpose can be found in the Parliamentary material. Judgments from the Supreme Court of Canada provide many eloquent statements about the ideals of democratic participation in the political process.
Report of the Committee on Election Expenses 1966 "Barbeau commission"
"Parliament should encourage electors to grant financial support to the party of their choice."
- p. 35;
"An effort should be made to increase public participation in politics, by broadening the base of political contributions through tax concessions to donors."
- p. 44;
"The Committee considers the tax credit to be an encouragement to the individual to involve himself in political activity, as well as a fund-raising device."
- p. 47;
"The Committee also believes that one not only has a right to contribute to the party of one’s choice, but a duty in the pursuit of which an elector should be encouraged rather than restricted."
- p. 48.
"[the tax credit] will also encourage more Canadians of average means to contribute to the party of their choice and become more actively involved in the political process."
- July 10, 1973, p. 5476;
"… a total tax credit of $500. The purpose of doing it this way is to encourage the small contributor and to assist the candidate in attracting contributions from as wide a number of the electorate as possible."
- July 10, 1973, p. 5477;
"As well, it contains a worth-while proposal for a tax credit for those who make contributions to the political party of their choice. In addition to limiting expenses, I am pleased to see that from the tax standpoint the bill provides greater benefits to those on low incomes, inasmuch as people on low incomes who make modest contributions to political campaigns and expenses will benefit more than those who are in a position to make large contributions. This provision will go a long way toward involving the public more directly in the political process in Canada. That is very worth while."
- July 12, 1973, p. 5547;
"We want to broaden the base of public participation in politics. We want to make it respectable not only to work for a political candidate but to make public donations of financial aid."
- July 12, 1973, p. 5565;
"However, I personally hope that the fact that a person gets a deduction on their tax will give their donation a certain air of respectability and acceptance by the public and that it will act as an incentive for making donations to political parties, which is highly desirable. The Barbeau commission spoke about the idea of broadening the base so that we have many people giving smaller amounts of money, and of course the tax credit system is designed for that; it is weighted toward the small donor."
- July 12, 1973, p. 5566;
"… the tax credit … proposal is fair. It treats the man with a low income in the same fashion as it treats the wealthy person. It will encourage public participation. … It will encourage people to donate to the party of their choice."
- July 12, 1973, p. 5571.
"I could thus summarize the purposes of the bill:
more active participation of the Canadian citizen …"
- January 9, 1974, p. 1413.
The tax credit was designed to increase participation in the political process by providing it to encourage people to contribute to the party of their choice.
See Supreme Court of Canada discussion of the ideals of a free and democratic society:
E. g. R. v. Oakes  1 S.C.R. 103, at p. 136 d:
" … faith in social and political institutions which
enhance the participation of individuals and groups in society."
Or, R. v. Keegstra  3 S.C.R. 697, at p. 728 a:
"… participation in social and political decision-making
is to be fostered and encouraged."
And, Keegstra at p. 764 a - b:
"… participation in the political process is open to all persons.
Such open participation must involve to a substantial degree the notion that
all persons are equally deserving of respect and dignity."
Shocking statistics about the actual use of political contribution tax credits
Since 1974, only about 1% of taxpayers claimed the tax credit during an election year, and about two thirds of a percent claimed the tax credit in years between elections. The social habit of 99% of taxpayers is to never participate in funding political activity. Of the 1% that do claim, the average was a $100 tax credit, about a fifth the potential. Thus, 99.8% of the total dollar value of the political contribution tax credit was never used.
100% of the registered political party activity in Canada is funded by 1% of taxpayers. Funding has been totally dominated by a very tiny minority of the wealthiest persons. The fundamental political problem has always been this relentless corrupt influence. Both the funding of the political process, and the way our electoral system is set up, has given the dominant minority the power to run the country as if they were the majority.
As pointed out in Libman v. Québec (A.G.)  3 S.C.R. 569, in para. 84:
"Freedom of political expression, so dear to our democratic tradition, would lose much value if it could only be exercised in a context in which the economic power of the most affluent members of society constituted the ultimate guidepost of our political choices."
What the Supreme Court of Canada warned us about in Libman has already happened. From the beginning of Canada, a tiny minority of the most wealthy have been doing this.
As stated in the Report of the Committee on Election Expenses back in 1966:
"The Committee finds a paradox in the public’s passive tolerance of the dangers inherent in financing political parties by a relatively few large donors."
- p. 46.
Throughout the history of the British Empire which created the dominion of Canada, the professional politicians in the big parties were totally funded by the same tiny minority. The real world already is the result of the real contributor’s choice arrangements in the past. The wealthy minority have gotten what they demanded from our political economy.
The political contribution tax credit was intended to be a possible solution to the most important political problem: the power of money, and the relentless corrupt influence of money upon the political process. This is the fundamental political problem that is the source of many other problems. Here, the more one knows, the worse it gets! If one looks at the social facts, and at the definition of words, then the truth is that Canada is not a free and democratic society, Canada is really a fascist plutocracy. The government regulates our economy for the benefit of the wealthiest persons. The people extracting the maximum short-term sense of "profit" from the system are the ones who are funding the political process and thus able to influence the government. The profound problem is the corruption of the politics in our past that has built the fundamental structure of our political economy. That structure automatically runs a debt treadmill, which drives us towards more social polarization, and destruction of the natural world. This debt treadmill exists because governments have given away the power to make money out of nothing, and almost all of our new money is created as a debt, which can only be paid back in the society as a whole by creating more money out of nothing, as even more debt. The whole world’s growing debt problem comes from the completely corrupt and crazy way the global monetary and banking system has been developed, trapped in a vicious cycle of dishonest governments and ignorant citizens. Canada’s current 0% reserves banking law is infinitely corrupt. Our monetary system is an unsustainable accounting system inside our political economy, which is unsustainable both environmentally and socially. To solve environmental and social problems requires radical changes in our crazy and corrupt monetary system.
Profit from Protesting the Plutocracy
The political economy we have now depends upon the ability of a tiny minority of the most wealthy persons to be able to use their money to influence the political process. They can only do that because they have the most money, and everyone else has been conditioned not to participate. To make the ideals of the tax credit become real would require that millions of individual taxpayers change their bad habit of never participating.
The history of the political contribution tax credit is the history of ideals stopped dead. The tax collection authorities deliberately denied and suppressed more tax credit use. Since 1974, the political contribution tax credit has been the victim of hypocrisy and lies about the nature of political contributions. Most wide-spread notions presumed about political contributions are wrong. These mistaken views have been expressed in books such as the Dictionary of Canadian Law, which defined "political contribution" as being practically equivalent to being a gift made to a registered charity, which is totally absurd. Real politics has always been about the exercise of power, primarily for personal benefit.
The best politics would be based upon the enlightened self-interest of all citizens.
To not participate is to allow the present system to continue the same as it is now,
which is the paradox of the passive tolerance by the public of complete corruption.
It is an individual choice of each taxpayer whether or not to participate in the process, but, the tax credit scheme makes it cost something for a taxpayer not to participate. One way of thinking about the tax credit is that it returns some of the benefit of the taxpayer’s labour to their own control. The $400 net benefit to the contributor can be compared to how long it takes that contributor to earn $400 after taxes. Participation may represent regaining control of several days of labour. Another way to look at it is that taxpayers get to decide how the government spends some of their tax money, or that taxpayers can choose to pay some of their taxes to an opposition political party.
The tax credit puts a price tag on apathy. There are no good reasons not to do it.
A person who is too poor to be a taxpayer can not take advantage of the tax credit.
A person who is too broke to be able to budget can not take advantage of the credit.
Persons who are paranoid about being audited will likely be too afraid to participate.
The unknown future of tax credit use
If one can not get people’s attention with several hundred dollars of their own money, then it is hard to imagine anything else that would encourage them to participate. If the tax credit opportunity is not enough to encourage participation, perhaps nothing else will. So far, the real history of the tax credit has not given any reasonable grounds for hope.
There is a terrible irony that not participating continues the default to a fascist plutocracy value system being in actual control of Canada. Yet still, a common objection to the political tax credit scheme is that to take advantage of it is somehow an immoral thing. There is a peculiar prejudice against self-interest, which paradoxically allowed the worst forms of self-interest to flourish and triumph. The reality of the funding of our political process has resulted in successful politicians becoming professional liars or hypocrites. Our government is based on being able to fool enough of the people enough of the time.
Taxpayers do not know that they have a legal right which they have never used before. They do not know they can become the principal in a political contribution contract which a registered agent can execute in order to get the tax benefit from participation. When it comes to political contributions, the government denied and suppressed the truth about the tax credit as much as they could for as long as they could, and the courts helped them get away with that in a similar fashion. Since the public was deliberately lied to for twenty-five years, most people believe lies about political funding, and political prejudice continues to control people’s behaviour through the inertia of unexamined social habits. The prejudiced view that the tax credit must be too good to be true is a peculiar obstacle since it is true. This tax credit delivers the best return, with the least risk on the amount of money invested, simply because the political contribution tax credit is so generous. Naturally, the old political parties have created the greatest tax benefit for themselves. The tax credit scheme returns that benefit to the taxpayers as an incentive to participate.
The Marijuana Party is a protest party that provides to taxpayers the ability to express dissent in a way that is personally profitable. All the fraudulent forces we protest have been able to dominate the political process for a long time, and are deeply entrenched. But, right now, the tax credit really permits taxpayers to make a profit from protesting. There really is no better deal available, however, taxpayers have never been told before.
The goal is to increase the participation rate of millions of taxpayers to near 100%.
When our ideals about democratic participation where put into the law (albeit only under the pressure of political scandals about some outrageous funding of the political process in the past) a dynamic tension was set up between the real world and our good ideals. We live in a real world where 99% never participate, yet the only way forward is to try to diminish the amount of hypocrisy that surrounds our ideals of freedom and democracy. The weird history of the tax credit demonstrates how hypocritical Canada actually is, but nevertheless, our only reasonable hope is to try to diminish the degree of dishonesty.
Now is the first time that both the truth about the tax credit, and a registered political party willing and able to act on that truth, have both come together. Whatever happens will be the result of the response of individual taxpayers. However, as the 1966 Report of the Committee on Election Expenses warned on page 46: "… any such program would necessarily have to be extended over a considerable period to educate the public on the merits of the program, and to overcome inertia."
The tax credit does not depend upon any more electoral success of the Marijuana Party. The Marijuana Party has the power as a registered political party to offer the tax credit across Canada to all taxpayers. To offer the power to become an agent opens the way. The Marijuana Party needs registered agents in every riding, which means appointing at least a few hundred agents. Perhaps the party will appoint thousands of agents, or since every taxpayer could be appointed to become their own registered agent, there could even be millions of registered agents acting for themselves and acting for a small group.
Since all of our worst political problems are quantitatively growing at an exponential rate, the only practical hope for solutions is that they too have to grow at an exponential rate. Use of the political contribution tax credit has this real potential to grow since 99.8% of it was never used before, but could possibly be taken advantage of now by all taxpayers.
Full use of the tax credit is a theoretical solution to some of our worst political problems.
1 Income Tax Act sections
section 127(3) · 3, 5, 7, 8, 9
section 127(3.1) · 7, 9
section 127(4) · 7
section 127(4.1) · 7
section 127(4.2) · 7
section 18(1)(n) · 8
2 Income Tax Act sections
section 230(3) to (8) · 7
section 230.1 · 7, 9, 17, 18
section 230.1(1) · 7, 17
section 230.1(3) · 7, 18
section 238 · 7, 9
section 245 · 4, 5
section 248 · 8
section 251 · 8
3 Elections Act sections
section 375 · 9
section 383(2) · 20
section 387 · 12
4 Elections Act sections
section 404 · 9
section 405 · 9, 10
section 405(3) · 9
section 408 · 10
section 410 · 9, 17
section 411 · 9
section 415 · 7
section 416 · 9
section 417 · 10
section 418 · 10
section 421 · 13
section 424 · 10
section 424(1) · 12
section 426(3) · 10
section 429(1) · 12
section 433 · 11
Barbeau Commission · 36, 39
CCRA Marijuana Party’s business number 867 767 915 · 21, 31
Commons Debates · 37
General Tax Guide · 6, 7, 21
IC78-10R3 · 17
Information Circular 75-2R6 · 5
Information Circular 78-3 and 87-1 · 4
IT-75R3 · 21
Longley v. Her Majesty the Queen · 4, 7, 10, 14, 21, 22, 23, 26
Lord Brightman · 3, 13
Lord Slade · 3
RC4157(E) Rev.01 · 21
Regulation 2000 · 8, 15, 16
Regulation 205 · 21
SEC · 14, 15, 20
Senate Debates · 37
T 1 · 32
T 2092 · 8, 32
T4A · 21, 31, 32
T4A Summary · 21