Canadians will go to the polls in a federal election set for September 20.
WHY IT MATTERS
Elections always matter, of course! Votes determine who represents Canadians in Parliament, and the party with the majority of successful candidates will form the government.
But for charities, what matters right now is whether your activities are regulated under the Canada Elections Act.
During the election period, any “third party” (including charities) that spends $500 or more on certain activities has to register with Elections Canada. The election period starts on the day the election is called and ends on election day when the polls close. That means right now.
So your charity needs to ask: are any of our activities regulated under the Canada Elections Act?
WHAT IS REGULATED?
Naturally, the next question is, what activities are regulated? There are two types of regulated activity that apply to charities:
1. Election advertising: publicly sending messages that promote or oppose a political party or candidate including by taking a position on an issue with which the party or candidate is clearly associated.
How do you know if your issue is associated with a party or candidate? It all depends on the context. The broader the advertising, the less likely there will be a clear association. Elections Canada explains that where a candidate has championed or opposed a cause and it’s a central part of that campaign, it would likely be regulated.
2. Election surveys: surveys that are used to decide whether or not you’ll participate in election advertising or that are used to organize and carry out election advertising. Importantly, it includes surveys that are directed at your own members or employees.
IMPORTANT! Charities are ALWAYS prohibited from supporting or opposing political parties or candidates. Whether there is an election, or whether your charity registers as a third party under the Canada Elections Act, supporting or opposing parties or candidates is ALWAYS off limits.
HOW IS IT REGULATED?
As soon as your charity conducts any regulated activity with expenses of $500 or more, you have to:
- Register as a third party with Elections Canada
- Open a separate bank account for the sole purpose of your regulated activities
- Appoint a financial agent to
- administer financial transactions related to your regulated activities
- report them to Elections Canada
- Note: this person has to consent to the role and must be identified in your initial registration form.
If your expenses are $10,000 or more, an auditor must be appointed. Depending on when the $10,000 threshold is reached, interim reporting may be required.
Four months after election day, the financial agent must send a third party return and an auditor’s report, if applicable.
The expense limit on regulated activities is $525,700 overall and $4,506 in a given electoral district.
WHAT IS NOT REGULATED
There are activities that aren’t regulated. These include:
- Editorials, debates, speeches, interviews, columns, letters, commentary or news
- Distributing a book for its commercial value if its release was planned regardless of the election
- Sending a document directly to members, employees or shareholders
- Individual, free, online communication about personal political views (charities need to be cautious here that the personal political views are clearly dissociated from the charity)
- Calling electors only to encourage them to vote
- A third party’s own website content, and social media messages that do not have a placement cost
The Canada Elections Act registration requirements must be read along with two other important limits:
- Income Tax Act limitations. Your charity can participate in public policy dialogue and development activities, but can never support or oppose a political party or candidate.
- Lobbying Act requirements. If your charity communicates directly or indirectly with federal public office holders, you need to be aware of the lobbying rules and might need to register.
Charities can participate in the election process, and can register as third parties. Just make sure you’re aware of the expenses you’re incurring, whether any of your advertising or survey activities fall within the scope of what is regulated, and ensure that you are not supporting or opposing any particular candidate or party.
Elections Canada, Political Financing Handbook for Third Parties, Financial Agents and Auditors (June 2021)
Elections Canada, “Questions and Answers for Third Parties”
DID YOU KNOW?
Although in practice the Prime Minister generally decides when an election is going to happen, there are formalities to the process.
Dissolving Parliament means that any bills that are still going through the process will “die” – that is, the next government has to re-introduce the bills and the whole process starts over. Even if a bill has been through a committee process it will have to start at the beginning. It can’t start at committee.
You can find out more about the Parliamentary cycle here.
Noteworthy is provided for general information purposes and does not constitute legal or professional advice. Every organization’s circumstances are unique. Before acting on the basis of information contained in this blog, readers should consult with a qualified lawyer for advice specific to their situation.