Be careful what you advertise: new Canada Elections Act requirements

Canadian businesses, organizations and individuals who engage in advertising need to be aware of the recently enacted Elections Modernization Act, which amends the Canada Elections Act (Act).

What you need to know

• The amendments came into force on June 13 and are intended to enhance the transparency of third-party participation in the electoral process.
• The amendments include increased regulation of activities such as partisan and election advertising, partisan activities and election surveys conducted during the pre-election or election period.
• Third parties that incur $500 or more in expenses associated with regulated activities must register with the Chief Electoral Office.
• Expenses incurred conducting regulated activities must be capped at $700,000 during the pre-election period and at $350,000 during the election period.
• Failure to comply with the Act may result in significant fines and jail.

Who is affected and what activities are regulated?

A third party is defined broadly to include any person or group that is not a candidate, a potential candidate, a registered party, or an electoral district association of a registered party¹. A third party will be required to register with Elections Canada if it incurs expenses of $500 or more for conducting regulated activities.

Regulated activities include partisan and election advertising, election surveys (which are conducted to assist in the transmission of election or partisan advertising) and partisan activities such as calling electors and organizing rallies. The implications resulting from partisan and election advertising depend on the stage in the electoral process during which the advertising takes place.

Partisan advertising

Partisan advertising, which takes place during the pre-election period, means the public transmission of an advertised message that promotes or opposes a party, a candidate or potential candidate and includes naming them, showing their likeness, identifying them or providing a link to an internet page. The Act defines the pre-election period as beginning on June 30 and ending, at the earliest, on September 2 (the beginning of the election period).²

Election advertising

Election advertising is very similar to partisan advertising with two notable differences. First, election advertising takes place during the election period which starts when the Governor in Council issues a proclamation that a general election be held³. Second, election advertising in addition to including the public transmission of an advertised message that promotes or opposes a party, a candidate or a potential candidate also includes, a message that takes position on an issue with which a party or candidate is associated. Any issue mentioned by the party or candidate in a platform, debate, or social media campaign could be viewed as being as associated with a party or candidate.

The concept of “issue advertising” has been much contested over the years, as many have complained that its definition is overly broad. The Supreme Court of Canada in Harper v Canada (Attorney General) held that the scope of what constitutes issue advertising, while broad, is not unconstitutionally vague⁴. As such, advertising messages transmitted during the election period may engage the advertising rules even if the issue being addressed seems apolitical.

Third parties that therefore wish to advertise during an election period will need to consider whether their advertising could be perceived as taking a position on an issue that is associated with a party or a candidate. However, the Act does provide certain exceptions such as sharing one’s views via vehicles such as editorials, speeches, interviews, or transmitting documents directly to employees or shareholders.⁵

Obligations in conducting regulated activities

The first obligation on a third party who engages in a regulated activity (whether in the pre-election or election period) and reaches the expense threshold of $500 is to register with Elections Canada.

Once registered, the third party becomes subject to several requirements—the most important being a cap on expenses incurred for regulated activities. Expenses caught under this cap include the market value of goods, labour or services.

The maximum for pre-election period expenses is capped at $700,000,⁶ whereas the maximum for election period expenses is capped at $350,000.⁷ The Act provides for this amount to be adjusted for inflation.⁸ Registered third parties are also subject to other obligations such as mandatory name placement;⁹ the appointment of an auditor should expenses exceed $10,000;¹⁰ and the filing of third-party expenses returns.¹¹

Consequences of breaching the Act

There are many offences under the Act relating to election advertising and, depending on the offence, may result in fines and or imprisonment. Of particular concern for compliance purposes are the offenses related to “collusion.” The Act provides that a third party who collaborates (or, as referred to in the Act, “colludes”) with another third party to circumvent the regulated activities expense limit may be liable for fines of up to $100,000 and/or to imprisonment for up to five years.

For this reason, any third party who collaborates or discusses election advertising with another party while conducting its own advertising campaign should be particularly sensitive to the legislative requirements.

Conclusion

With a fast-approaching federal election, organizations should review their advertising campaigns and strategies to ensure full compliance with the Act’s requirements.

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¹ See section 349.

² Pre-election period is a defined term under section 2(1).

³ For the 2019 federal election, this may occur as early as September 2.

⁴ [2004] 1 S.C.R. 827 at para 90.

⁵ See section 2 of the Act for the full list of the exceptions.

⁶ See section 349.1 of the Act.

⁷ See section 350 of the Act.

⁸ This year’s maximum amounts adjusted for inflation are as follows: the maximum limit for the pre-election period is $1,023,400 and the maximum amount for the election period is $511,700.

⁹ This is specific to any partisan advertising message during the pre-election period (s 349.5), and to any election advertising message during the election period (section 352).

¹⁰ This is specific to activities during the pre-election period (section 349.8).

¹¹ For the pre-election period, see generally 349.91(1). For the election period, see s 357.01(1).