Important Changes for Third Parties in the Canada Elections Act
April 17, 2019
Recent changes to the Canada Elections Act (Act) will have wide-ranging and important implications for businesses, industry associations, advocacy groups, community groups, unions and other persons who communicate with political parties or campaigns before and during federal elections.
The newly introduced restrictions, among other things, include extensive communication, expenditure and collusion prohibitions, which will apply as early as June 30 of this year, well in advance of the elections scheduled for the fall. These changes will significantly modify the ways in which parties and stakeholders may interact in the period leading up to Canada’s October 21, 2019 general election.
On December 13, 2018, Bill C-76: An Act to amend the Canada Elections Act and other Acts and to make certain consequential amendments (Bill C-76) received royal assent. Bill C-76 makes an array of changes to the Act, including the introduction of significant communication and collusion prohibitions during a defined period before the election period of a general election (pre-election period) and the election period. These communication and collusion provisions will come into force on June 13, 2019.
Prior to Bill C-76, the Act restricted collusion in the narrow and illicit sense, i.e., coordinated activity between a campaign and a third party for the purposes of intentionally circumventing maximum campaign expenditure limits. In past practice, rules were relatively flexible with respect to non-expenditure coordination. Rules relating to coordination between campaigns and third parties in respect of volunteers, message or fundraising were fairly flexible. In contrast, coordinating on things like advertising or other campaign expenditures was more tightly controlled.
Bill C-76 considerably widens the breadth of these prohibitions. In particular, the new rules categorize as problematic even the “sharing of information” that may influence strategy, partisan activities, partisan advertising, election advertising or election surveys of third parties.
Accordingly, previously acceptable activities – such as sharing talking points with a stakeholder, industry association, worship community or union who will distribute them to their members, identifying electoral districts in need of volunteers or contributions, or sharing polling – could attract regulatory scrutiny. Even activities clearly designed to persuade and not to coordinate (such as submitting or responding to a policy survey prepared by a stakeholder), could in certain circumstances encounter regulatory friction.
PRE-ELECTION PERIOD RESTRICTIONS
Historically, third parties were free to conduct their affairs relatively unfettered prior to the dropping of an electoral writ, which typically occurred 35 days before the date of the election.
As a result of Bill C-76, restrictions on communications by or with third parties now begin well before the writ. In the 2019 federal election cycle, restrictions on communications by or with third parties will kick in on June 30, with pre-election limits running to mid-September (unless the writ is dropped early), at which point the election period regime will take over. The pre-election regime will regulate not just registered parties, associations and candidates but also potential candidates and persons associated with potential candidates.
Third parties are limited to spending an aggregate amount of C$700,000 in partisan advertising expenses, election survey expenses and partisan activity expenses during the pre-election period. Third parties may not circumvent or attempt to circumvent this maximum pre-election expense amount, including by splitting themselves into two or more third parties for the purpose of circumventing the maximum amount or acting in collusion with another third party so that their combined pre-election amount exceeds the maximum amount. This restriction will be particularly important for industry associations or similar groups with constituent members who may wish to communicate during an election both collectively and individually.
Third parties are also now subject to registration requirements in the pre-election period. A third party must register immediately after having incurred C$500 in aggregated partisan advertising expenses, election survey expenses and partisan activity expenses during the pre-election period.
Expenditure caps will also apply to registered parties, and Bill C-76 limits the maximum partisan advertising expenses for a registered party to C$1.4-million in the pre-election period.
ELECTION PERIOD RESTRICTIONS
During the election period (which begins either 37 days before Election Day, or the day the writ is dropped, if earlier), third parties cannot exceed an aggregate amount of more than C$350,000 in election advertising expenses, election survey expenses and partisan activity expenses. Here again, third parties may not circumvent or attempt to circumvent the maximums, including by splitting into two or more third parties.
As in the pre-election period requirements, third parties are subject to registration requirements in the election period. A third party must register immediately after having incurred C$500 in aggregated election advertising expenses, election survey expenses and partisan activity expenses during the election period. If a third party has already registered during a pre-election period that ends the day before the issue of the writ of election, the third party is deemed to be registered for the purposes of the election period.
The Act imposes steep fines, significant reputational consequences and other serious penalties up to and including imprisonment, for those violating the third-party anti-collusion restrictions on sharing information.
Businesses, industry associations, professional associations, unions, and other stakeholders who are considering engaging with federal political parties, associations or candidates on or after June 2019 (whether by advertising, polling, or even for the simple distribution of policy surveys, or connecting of volunteers or donors to campaigns) should carefully consider and understand the new rules, and seek counsel before finalizing their plans for the coming months.
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