On June 8, 2021, the Ontario Superior Court of Justice struck down recent amendments to Ontario's Election Finances Act, RSO 1990, c E7 (EFA) that restricted third party spending on political advertising and related activities in the 12 months preceding a provincial election.
On June 14, 2021, the Ontario government invoked section 33 of the Charter (Notwithstanding Clause) and reintroduced the new third party advertising restrictions, which are now in effect.
The result is that, for the period starting June 14, 2021, and in the run up to the next provincial election set for June 2, 2022 (Pre-Election Period), a rigorous third party political advertising regime is in place in Ontario.
THIRD PARTY OBLIGATIONS
Under these rules, third parties are limited to spending an
aggregate amount of C$600,000 in political advertising during the
Pre-Election Period. Furthermore, a third party cannot spend more
than C$24,000 in any electoral district. These amounts increase to
C$637,200 and C$25,488, respectively, in 2022 due to annual
"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 associated with a political leader, candidate or party. 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. The courts have interpreted this obligation broadly to mean that "third parties cannot do together what they cannot do on their own."
Contravention of the EFA can result in steep fines and reputational consequences.
In Working Families Ontario v. Ontario, Justice Morgan of the Ontario Superior Court of Justice held that the amendments to the EFA infringe on both freedom of expression and freedom of association rights under the Charter.
Given the broad definition of freedom of expression guaranteed by section 2(b) of the Charter, there was little doubt that the recent amendments to the EFA restricted speech. The question turned on whether the amendments were justifiable limits under section 1 of the Charter. For a section 1 analysis to succeed, the test set out in R v Oakes,  1 SCR 103 must be met. Ultimately, the EFA amendments were found to not minimally impair the applicants' rights to freedom of expression. Justice Morgan found that the government's own evidence demonstrated that less impairing measures (i.e., the six-month pre-election period) were both reasonable and available. As a result, the amendments to the EFA were found to violate section 2(b) of the Charter and were not saved under section 1.
Justice Morgan also noted that while the amendments to the EFA prevent third parties from undertaking certain activities (e.g., circumventing the spending limits), they did not prohibit the associational aspect of that activity.
There continue to be ongoing constitutional issues under section 3 of the Charter as it relates to certain provisions of the EFA. Notably, a new challenge based on section 3 has in fact been commenced. We note that, democratic rights outlined under section 3 of the Charter are exempt from the application of the Notwithstanding Clause, meaning that should a Charter challenge under section 3 succeed, the EFA provisions at issue may be found unconstitutional and struck down. Businesses and organizations who engage in third party activities during the Pre-Election Period should carefully monitor constitutional developments in this regard.
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