The Ontario provincial campaign has begun. As we approach Election Day, June 2, 2022, businesses and organizations who engage or are planning to engage in the political process should be mindful of the rigorous third party political advertising regime that came into effect last year and the contribution limits under the Ontario Election Finances Act (EFA), as well as Ontario’s lobbying and conflict of interest rules under the Ontario Lobbyists Registration Act (LRA).
ELECTION FINANCE AND CONTRIBUTION RULES
Third party obligations
Under Ontario’s third party political advertising rules, for the period starting June 14, 2021, and in the run up to the election date (Pre-Election Period), third parties are limited to spending an aggregate amount of C$654,600 in political advertising and cannot spend more than C$26,184 in any one electoral district.
“Political advertising” includes a broad range of advertising related to public policy and is not limited to partisan ads specifically promoting or opposing a candidate or party. In particular, it includes “issue advertising”, which may apply to a wide range of public policy issues which are closely associated with a political leader, candidate or party. According to guidance for third parties issued by Elections Ontario, “determining whether a given issue is “closely associated” with a party, its leader, or a candidate will depend on which issues are likely to be addressed in the upcoming election campaign, or which are distinctly associated with a particular party, leader, or candidate in the public discourse.”
As a result, third parties should carefully monitor public policy topics that political leaders, candidates and parties take a position on during the Pre-Election Period. Advertisements on public policy topics may initially not be caught by the EFA but subsequently classified as issue advertising as the Pre-Election Period progresses. The EFA sets out detailed criteria to help determine whether issue advertising is political advertising.
Third parties must register with Elections Ontario upon incurring C$500 or more in political advertising expenses in either the Pre-Election Period or during an election period, in addition to filing interim reports in certain instances.
Third parties may not circumvent or attempt to circumvent the maximum Pre-Election Period spending 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 Period amount exceeds the maximum amount.
Contravention of the EFA can result in steep fines and reputational consequences.
Constitutional challenges to the EFA
These third party political advertising rules remain in effect today. Although in June 2021, Justice Morgan of the Ontario Superior Court struck down the third party spending restrictions under the EFA for infringing on freedom of expression rights under section 2(b) of the Charter, the Ontario government subsequently invoked section 33 of the Charter (the notwithstanding clause) and reintroduced the restrictions. In a second constitutional challenge, Justice Morgan held that the third party advertising restrictions did not infringe the right to vote under section 3 of the Charter. See our previous Blakes Bulletin here for an analysis of this case.
Anyone seeking to make a donation to a political party, constituency association or a candidate during this election period should be aware of the rules limiting contributions.
A contribution includes money and a wide range of goods and services included in kind. A contribution to any political party, constituency association, nomination contestant, candidate or leadership contestant does not include:
- any goods produced, or services performed by voluntary labour; or
- any money, goods or services that is registered under the EFA.
Under the EFA, a contribution can only be made by an individual person. A corporation or trade union cannot make a contribution. Furthermore, a person cannot contribute funds that do not actually belong to that person, or any funds that have been given by any person or by a corporation or trade union for the purposes of making a contribution. This means that employees of a corporation cannot contribute and subsequently claim an expense reimbursement from the corporation.
Contributions also cannot be from any person normally resident outside Ontario.
In the 2022 calendar year, contributions made by a person cannot exceed the following threshold:
- C$3,325 in total in a year to any one registered party;
- C$3,325 in total in a year to registered constituency associations and registered nomination contestants of any one registered party;
- C$3,325 in total in a year to registered candidates of any one registered party;
- C$3,325 in total in a year to all registered independent candidates; and
- C$3,325 in total in a year to any one registered leadership contestant of a registered party in a calendar year that falls during a leadership contest period or during which the contestant is required to be registered.
Anonymous contributions are only allowed up to C$10 per person if collected at a meeting held on behalf of or in relation to the affairs of a registered candidate, political party or constituency association.
LOBBYING AND CONFLICT OF INTEREST RULES
In the fast pace and occasional drama of an election campaign, it is often too easy to forget that the lobbying and conflict of interest rules, which strictly govern how individuals and corporations interact with decision-makers in government, continue to apply. It is prudent for businesses to continue to observe the registration obligations required of lobbyists and the restrictions from offering gifts to public office holders.
Registering as a lobbyist
If you or a member of your business or organization communicate with a public office holder in an attempt to influence certain decisions in the government of Ontario, you may be engaged in lobbying and will be required to register your activities under the LRA.
A public office holder includes:
any minister, officer or employee of the Crown;
a member of the Legislative Assembly and any person on their staff (but not candidates seeking election);
a person who is appointed to any office or body by or with the approval of the Lieutenant Governor in Council or a minister of the Crown, other than a judge or a justice of the peace;
an officer, director or employee of any agency, board or commission of the Crown;
a member of the Ontario Provincial Police Force; and
an officer, director or employee of Ontario Power Generation Inc. and each of its subsidiaries, or Independent Electricity System Operator.
There are two types of lobbyists under the LRA: 1) an in-house lobbyist is a person who, alone or collectively with other members of the business or organization, spends more than 50 hours in any year lobbying on behalf of the business or organization; and 2) a consultant lobbyist is an individual who, for payment, undertakes to lobby on behalf of a client.
“Lobbying” means communicating with a public office holder in an attempt to influence decisions regarding:
the development of a legislative proposal by the Government of Ontario or a member of the Legislative Assembly;
the introduction of any bill or resolution in the Legislative Assembly or the passage, defeat or amendment of any bill or resolution that is before the Legislative Assembly;
the development or enactment of a regulation;
the development, establishment, amendment or termination of a program, policy, directive or guideline of the Government of Ontario;
the awarding of a grant or financial benefit by or on behalf of the government;
the transfer of any government interest in a business that provides goods or services to the Crown or the public; or
privatization of the provision of goods or services to the government.
For consultant lobbyists, two additional activities qualify as lobbying: arranging a meeting with a public office holder, and communicating with a public office holder in an attempt to influence the awarding of a contract. In-house lobbyists may communicate with public office holders about the awarding of a contract without it being lobbying.
There are certain activities that are not considered lobbying, including making submissions in public proceedings to a legislative committee, or an individual making submissions to a public officer holder with respect to the enforcement, interpretation or application of a statute or with respect to the implementation or administration of a policy, program, directive or guideline by that public office holder.
Failure to register as a lobbyist in accordance with the LRA may carry financial penalties, a prohibition from lobbying activities for two years and reputational damages.
Conflict of interest rules
Lobbyists are also prohibited from knowingly placing a public office holder in a position of real or potential conflict of interest, which includes a public office holder who engages in accepting a gift or personal benefit.
The Office of the Integrity Commissioner (Ontario) has published an Interpretation Bulletin which indicates that “gifts” include meals, tickets to events, trips and gift baskets or flowers. Small tokens of appreciation may be offered or given to public office holders. Lobbyists should consult with the Office of the Integrity Commissioner (Ontario) before offering a gift to ensure compliance with the LRA.
For further information, please contact:
Alexis Levine 416-863-3089
Elder Marques 613-788-2238
Alysha Li 416-863-2506
Iris Fischer 416-863-2408
or any member of our Public Sector Crisis & Compliance group.
Blakes and Blakes Business Class communications are intended for informational purposes only and do not constitute legal advice or an opinion on any issue. We would be pleased to provide additional details or advice about specific situations if desired.
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