On April 30, 2018, the Government of Canada tabled Bill C-76,[1] which proposes significant amendments to the Canada Elections Act (the “Act”). The federal government is optimistic that the reforms will be in place by the next federal election in 2019. If you or your employees, officers, or directors plan to be involved in the 2019 federal campaign, these amendments may affect you.

This election law updated is intended as general guidance only. If you have specific questions or concerns, please contact Awi Sinha, Adam Goldenberg, or Jessica Firestone. We would be pleased to assist you.

Bill C-76 aims to boost electoral participation, make voting more accessible, and enhance transparency and security. Amid continued fallout over alleged Russian interference in the 2016 U.S. presidential elections, the Canadian government is keen to ensure the fairness and integrity of the federal electoral process.

What’s new?

The proposed amendments to the Act will affect how individuals, businesses, and other entities interact with the federal electoral process in the months before and during an election campaign. Two categories of proposed amendments are of note in this regard: (1) revised limits on expenditures by third parties, including by private and not-for-profit entities; and (2) tighter restrictions on political activities by foreign individuals and organizations. We will discuss each in turn.

1. Stricter requirements for third party spending

Businesses and interest groups — referred to collectively as “third parties”[2] — may become involved in a federal election by organizing political events or by producing and disseminating campaign-related advertising prior to and during the writ period. Bill C-76 would introduce an aggregate pre-election spending limit of $700,000 for third parties, across three categories of expenses: “partisan activity expenses”; “partisan advertising expenses”; and “election survey expenses”.[3] Only $7,000 of these pre-election expenses could be spent in any one electoral district.

To give effect to these restrictions, Bill C-76 would add the following defined terms to the Act:

  • “Pre-election period” would mean, in an election year, the period between June 30 and the first day of the writ period or the 37th day before Election Day, whichever is earlier.[4]
  • “Partisan activity expenses” would mean expenses incurred in carrying out activities — such as door-to-door canvassing, phone-banking, and organizing events — that promote or oppose a political party or candidate. Expenses that would not be included are: (i) those incurred with respect to activities that merely take a position on an issue with which a party or candidate is associated; (ii) advertising expenses; and (iii) expenses incurred in organizing fundraisers.[5]
  • “Partisan advertising expenses” would mean expenses incurred in producing or transmitting advertising messages that promote or oppose a party or candidate, not including expenses with respect to advertising that merely takes a position on an issue with which a party or candidate is associated.[6]
  • “Election survey expenses” would mean expenses incurred in conducting opinion research that is used either to decide whether or not to carry out partisan activities or partisan advertising, or in carrying out partisan activities or partisan advertising.[7]

In sum, during the roughly three-and-a-half months before the official start of an election campaign, entities other than political parties and candidates would only be allowed to spend a total of $700,000 on activities, advertising, and opinion research to support (or decide to support) a party or candidate, and no more than $7,000 of this total may be spent in any one riding.

During an election period — i.e., the period between the dissolution of Parliament and Election Day — a third party would not be permitted to incur expenses in an aggregate amount exceeding $350,000, and no more than $3,000 of this amount could be spent in any one electoral district.[8] This new limit would reflect an increase over the Act’s current third party expenditure limit, which is $150,000.[9] Contributions to parties and candidates from corporations, trade unions, and other entities would remain prohibited under the Act.[10]

Bill C-76 would distinguish “partisan advertising” (in the pre-election period) and “election advertising”[11] (in the election period). Unlike “partisan advertising”, “election advertising” would continue to include issue advertising, i.e., expenses incurred in producing or transmitting advertising that takes a position on an issue with which a party or candidate is associated. Election advertising expenses would continue to count towards a third party’s spending limit during the election period.[12]

Bill C-76 would also require third parties to follow certain accounting and disclosure rules. A third party would have to open and register a separate bank account for its partisan and survey expenses in the pre-election period.[13] It would also be obliged to identify itself in its partisan advertising in both the pre-election and election periods.[14]

Third parties that fail to respect these restrictions, or that seek to avoid them (or to help a political party avoid its own expenditure limits) would be subject to prohibitions, administrative penalties, or criminal liability.[15] The amended Act would prohibit dividing a third party into two or more entities and/or colluding with a party or candidate, either in the pre-election period or during the writ itself.

2. More stringent restrictions on non-residents

Bill C-76 would introduce tougher limits on election-related activities by foreign individuals and entities, including foreign political parties, trade unions, governments, and political parties.[16] Such “foreign third parties”[17] would be prohibited from: (i) incurring any expenses whatsoever for partisan activities, partisan advertising, or election surveys, during the pre-election period; (ii) incurring any expenses whatsoever for partisan activities, election advertising, or election surveys, during the election period; (iii) knowingly making or publishing false statements about a party or candidate; or (iv) doing anything to influence a voter that is prohibited by federal law or regulation.[18]

These restrictions will apply to: (i) individuals who are not Canadian citizens or permanent residents and who do not live in Canada; (ii) corporations or other entities that are incorporated, formed, or otherwise organized outside of Canada and that do not carry on business in Canada; (iii) groups, where none of the individuals responsible for the group is a Canadian citizen or permanent resident or resides in Canada; (iv) foreign trade unions; (v) foreign governments and their agents; and (vi) foreign political parties.[19] Moreover, third parties would not be permitted to use funds contributed by any of these foreign individuals or entities for partisan activities, partisan advertising, or election surveys during the pre-election period.[20] The Act’s existing prohibition on the use of foreign funds for advertising during the election period would remain.[21]

Bill C-76 would remove the Act’s current restrictions on voting by Canadians who live abroad.[22] Presently, under the Act, Canadian citizens are disenfranchised if they have lived outside the country for more than five years or do not intend to return.[23]

The bottom line

The foregoing is not an exhaustive description of the changes that Bill C-76 would enact. Among other things, the proposed amendments would also: (i) cap the election period to 50 days;[24] (ii) require political parties to create and publicize privacy policies regarding the personal information they collect and use;[25] (iii) allow nomination contestants, candidates, and leadership contestants to claim related litigation expenses as a campaign expense;[26] (iv) impose a $1,100,000 limit on advertising expenditures by political parties during the pre-election period;[27] and (v) establish a Register of Future Electors in which 14 to 17-year-old Canadians may consent to be included.[28]

Taken together, the proposed changes stand to make a significant difference in how federal elections will be conducted in Canada, and how individuals and entities may participate in them. If you, your business, your employees, your officers, or your directors engage in the democratic process at the federal level, be sure that you understand how these forthcoming legislative amendments will affect you.