With Canada's 44th federal general election now underway, individuals and corporations that participate in the election or deal with public officials must be aware of the risk that comes with doing so. During the election season, here are three things you need to know.

1. Non-Political Organizations Must Be Vigilant When Advertising

A third party (that is, a person or group, other than a political party or candidate, that wants to participate in or influence elections) is subject to regulation during the election period if it engages in advertising (including issue advertising) or it engages in non-advertising activity that promotes or opposes a party or candidate. Many third parties are no strangers to political involvement - unions, for example, have a long history of political advocacy in Canada.

Many other organizations - including trade associations, businesses, and not-for-profit entities - are unaware that they, too, must register with Elections Canada if they engage in "issue advertising" during the election period. They are also subject to strict spending limits, both nationally and at the riding level.

An organization may be engaging in issue advertising without even knowing it. All that is required is the paid transmission of a message to the public that takes a position on a federal policy or issue. This could include criticism or support for a bill before Parliament, or a call for federal government action on a particular matter. To emphasize a crucial point: organizations do not need to endorse any candidate or party by name to be ensnared by this law.

2. Avoid Illegal Contributions - Especially Non-Monetary Ones

Many organizations are unaware of the risks associated with illegal political contributions. Making an unlawful contribution can result in a heavy fine, and even prison time.

Only individuals who are Canadian citizens or permanent residents can make contributions to political parties and candidates. Corporations are prohibited from doing so.

A contribution is either donated money (monetary contribution) or donated property or services (non-monetary contribution). The Canada Elections Act defines a non-monetary contribution as "the commercial value of a service, other than volunteer labour, or of property or of the use of property or money to the extent that they are provided without charge or at less than their commercial value." 1

Possible non-monetary contributions include but are not limited to:

  • Use of company vehicles to support a party or candidate
  • Use of employer IT equipment (e.g., phones, computers) to support a party or candidate
  • Phone bills and data charges related to work for a political party or campaign, when paid or reimbursed by the business
  • Paid labour (that is, working for a party or candidate on the employer's paid time)

The making or acceptance of a non-monetary contribution, other than one provided by an individual using the individual's own resources, is unlawful.

Employers should take active steps to ensure that employees getting involved in campaigns do so on their own time, without using company assets, resources or time. If the employer unknowingly reimburses an employee expense claim related to the costs of partisan (that is, a party or candidate) activity, then an unlawful contribution results.

3. Lobbying After Campaigning: Avoiding Conflicts of Interest

Companies and associations, and their employees, should also consider the restriction on lobbying of public office holders on whose behalf one has engaged in political activity. The Lobbyists' Code of Conduct prohibits an individual from lobbying a public office holder if the individual's past "political activities on behalf of a person ... could reasonably be seen to create a sense of obligation." 2

If that sense of obligation is reasonably perceived to exist, the individual is prohibited from lobbying that public office holder for an entire election cycle (up to four years). The risk of forming a sense of obligation rises with the frequency, quantity, and strategic importance of the political activities, as well as with the level of interaction with candidates.

Employees must be cautious and use judgment in determining whether their political activities will give rise to a perception of obligation. The legal test applied is objective and defies broad categorization: it asks whether a reasonable person would think an obligation exists.

Footnotes

1 Canada Elections Act, SC 2000, c 9, s 2(1).

2 Canada, Commissioner of Lobbying, Lobbyists' Code of Conduct, Rule 9.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.