New Requirements for Third Parties: Corporations, Unions, Groups and Individuals
Individuals or organizations that participate in the democratic process, but do not seek election themselves, may want to continue their activism during elections to support certain parties or candidates. Because parties and candidates are limited in how much they can spend for elections, the Canada Elections Act (the Act) regulates others' participation to ensure a level playing field in terms of spending. In the law, those who are regulated under these rules, whether they are corporations, groups, individuals or others, are called "third parties."
New rules are in force for the 2019 general election. They capture a broader array of activities over a greater period of time than the previous rules. These changes may require third parties to register with Elections Canada, even though they did not have to in past elections.
If you want to participate in an election by promoting or opposing a party, candidate or nomination contestant, here is what you need to know.
The new rules may apply to activities you are planning during the pre-election period (starting on June 30, 2019) and during the election period (from the call of the election to election day). The law applies to "partisan activities," "election surveys," "partisan advertising" and "election advertising" (collectively referred to as "regulated activities").
Partisan activities promote or oppose a political actor, including a political party or candidate, other than by taking a position on an issue associated with the political actor. The Act does not set out an exhaustive list of activities, but they can include organic social media campaigns, get-out-the-vote activities, reaching electors by telephone or participating in door-to-door canvassing to promote a party. An activity promotes or opposes a political entity by naming it, using the party's logo or showing a photograph of the candidate, for example. In some situations, even without directly referring to a party or a candidate, an activity could be perceived as partisan. For example, a third party that uses social media posts to encourage voters to engage in strategic voting in electoral districts with close races would be covered by the new rules as such campaigns generally oppose a party.
Election surveys are conducted during the pre-election period or the election period and are used to inform your regulated activities. For example, during the pre-election period, you may conduct a telephone survey in a riding to collect information about voting intent, and use the results for targeted door-to-door canvassing. This would be an election survey under the Act.
Partisan advertising (term used in the pre-election period) or election advertising (term used in the election period) is advertising that promotes or opposes a political actor, including a party or a candidate. During the election period, election advertising includes advertising that takes a position on an issue that is clearly associated with a candidate or party, without referring to the party, candidate or other actor. This is sometimes called "issue advertising" and is not regulated during the pre-election period.
It is important to note that even if an activity does not meet the specific definitions for an election survey or partisan or election advertising, it may nonetheless be considered a partisan activity.
If you carry out any of these regulated activities during the pre-election period or the election period, you must register as a third party with Elections Canada immediately upon incurring costs of $500 or more.
Once registered, third parties must submit a report on finances related to their regulated activities to Elections Canada within four months after election day. If certain thresholds of spending or contributions are met, there are a number of interim reports that may need to be filed with Elections Canada in addition to a final return.
The following Qs & As address some of the most common queries Elections Canada has received to date regarding the third parties rules that are now part of the Act. For more information, we invite you to consult the Political Financing Handbook for Third Parties, Financial Agents and Auditors.
Questions and Answers
When do the new provisions come into effect?
The new requirements for third parties came into effect on June 13, 2019.
Who can register as a third party?
You can register as a third party for an election if you are:
- an individual who is a Canadian citizen or a permanent resident, or lives in Canada
- a corporation that is incorporated in Canada or carries on business in Canada
- a group, if the person responsible for the group is a Canadian citizen or permanent resident, or lives in Canada
When do you need to register as a third party?
You must register immediately as a third party if you incur costs of $500 or more on regulated activities that take place during the pre-election period or the election period.
You cannot register before the relevant period starts. For a pre-election period, this is June 30. For an election period, this is the day the general election or by-election is called.
A third party that registers during the pre-election period and is also required to register during the election period is deemed to be registered for the election period (i.e. you do not have to register twice).
A third party that is required to register with Elections Canada has to:
- open a separate bank account for the campaign;
- appoint a financial agent, who must sign a declaration accepting the appointment;
- appoint an auditor if it spends more than $10,000 on regulated activities; and
- submit the General Form – Third Party (EC 20390) to Elections Canada.
What is a pre-election period?
Only fixed-date general elections have a pre-election period. In the case of a fixed-date general election on October 21, 2019, the pre-election period will begin on June 30, 2019, and end on the day before the general election is called. During a pre-election period, spending limits and other regulations apply to certain activities.
What is issue advertising?
Issue advertising is the transmission of a message to the public that takes a position on an issue with which a candidate or registered party is clearly associated, without identifying the candidate or party in any way. Issue advertising is only regulated during the election period. Like other election advertising, it must include a tagline.
There are three essential elements in issue advertising:
- Timing: The advertisement transmission must be during the election period. Any issue advertisements transmitted outside the election period are not regulated.
- Content: The content of the advertisement must be for or against an issue with which at least one candidate or registered party is clearly associated.
- Context: Determining whether a particular message promotes or opposes an issue with which a candidate or registered party is clearly associated is largely based on the facts, as each situation can have nuances that affect how an advertisement will be categorized.
The only instance in which the Canada Elections Act covers the promotion of an issue, without mentioning a candidate or party, is when someone spends money on issue advertising during the election period. In such cases, the issue must be clearly associated with a candidate or party. The rules in the Act on issue advertising do not cover other advocacy activities and communications, such as sending emails or text messages, having a website, canvassing door-to-door or giving media interviews.
The tables below summarize which issue-based activities or advertising are regulated, and in which periods. Keep in mind that election surveys are also regulated (see the introduction).
|Activity or advertising||Only takes a position on an issue||Also identifies a political actor|
|Activity or advertising||Only takes a position on an issue||Also identifies a political actor|
(if the issue is clearly associated with a party or candidate)
How do I know which issues are clearly associated with parties and candidates?
Individuals or groups can learn more about issues associated with parties and candidates from their political platforms, debates they participate in, social media campaigns, etc. Issues could be social, domestic or foreign policy, economics, or national security issues.
Does Elections Canada keep a list of election issues?
No, there is no list. It is parties and candidates who decide which issues are election issues during a campaign, and new issues or new positions can come to the forefront at any time.
What if I am advertising about an issue that is not clearly associated with a party or candidate when the election period starts, but becomes so during the campaign?
Once an issue becomes clearly associated with a party or candidate during the election period, any future advertising that takes a position for or against the issue is regulated. Advertising that has already been transmitted would not be retroactively subject to the rules.
What activities are not regulated?
Activities that do not promote or oppose a party or a candidate are not regulated. For example, a third party holds a debate with all of the candidates of a riding to discuss their views on a public policy issue. This is not a partisan activity.
Are activities regulated if they are directed at a third party's own members, employees or shareholders?
When a third party's activity or survey meets the definition of a partisan activity or election survey (see the introduction), it is regulated even if it is directed at the third party's own members, employees or shareholders.
Partisan and election advertising only count as advertising if they are transmitted to the public. By contrast, partisan activities are simply activities directed by a third party to reach electors, whether in person or remotely, one at a time or in groups. Similarly, election surveys are surveys addressed to people, no matter their relationship to the third party.
As an example, if a third party surveys its members about their voting intentions and then sends them an email promoting the top choice, these are both regulated activities.
Can a foreign third party participate in elections?
The Canada Elections Act prohibits foreign third parties from participating in elections and incurring expenses for regulated activities that take place during a pre-election period or an election period.
Furthermore, third parties are not permitted to use funds for a regulated activity if the source of funds is a foreign entity.
What are the spending limits for third parties?
The Canada Elections Act imposes separate expense limits for regulated activities that take place during a pre-election period and during an election period.
For a pre-election period starting on June 30, 2019, the total expense limit is $1,023,400. The pre-election period expense limit by electoral district is $10,234.
For an election period of a general election held between April 1, 2019 and March 31, 2020, the total expense limit is $511,700, and the expense limit by electoral district is $4,386.
Are fundraising expenses of a third party subject to the pre-election and election period spending limits?
Fundraising activities are specifically excluded from the definition of a partisan activity. Generally speaking, such expenses are not subject to the third party spending limits during the pre-election or election periods.
However, it is important to note that the addition of a request for funds to an activity such as a partisan mail out, phone call or promotional event will not alter the fact that the activity was a partisan activity. Since the fundraising portion of the letter, phone call or promotional event does not add any incremental expense, the full amount of the expense would be a partisan activity expense subject to the spending limit for the pre-election or election period.
What is the history of the third party regime?
The regulation of third parties has a long history in Canadian electoral law. The following are important milestones of the third party regime at the federal level.
The modern Canadian spending limits can be traced to the 1966 report of the Committee on Election Expenses, also known as the Barbeau Committee. The Barbeau Committee proposed limits on spending to ensure fairness in the electoral process. This fairness would be achieved, in part, by limits on election spending to ensure that wealthy voices would not dominate the debate at election time.
The Barbeau Committee also recognized that restrictions on the election spending of individuals and groups other than candidates and parties ("third parties") were necessary to ensure the effectiveness of spending limits. If third parties were allowed to spend unlimited amounts on parallel campaigns that augmented the spending of parties and candidates, this would give an unfair advantage to those parties and candidates supported by wealthy third parties. The spending limits on Party X would be rendered ineffective if "Friends of Party X" could spend an unlimited amount on promoting Party X.
The Election Expenses Act, which came into force on August 1, 1974, limited candidate and party expenses and also contained a prohibition on third parties incurring any expenses during elections to directly promote parties or candidates. There was an exception for "good faith" spending that was incurred for the purpose of gaining support on a policy issue or advancing the aims of a non-partisan organization.
The "good faith" defence to third party expenditures was removed from the law in 1983. In 1984, the law as a whole was struck down as unconstitutional by the Alberta Court of Queen's Bench. To ensure consistency in the application of the law, Elections Canada applied the Alberta court decision across the country for the 1984 and 1988 general elections, which meant there were no limits on third party spending in those elections.
The 1988 general election was dominated by the issue of a free trade agreement with the United States. The governing party supported it and the two opposition parties represented in the House opposed it. The last days of the campaign featured extensive advertising by third parties not directly supporting or opposing a party, but supporting or opposing an issue associated with one party, i.e. free trade. This experience highlighted that the benefits of spending limits could be nullified by third party ads, even if they did not specifically mention a party or candidate.
The Royal Commission on Electoral Reform and Party Financing ("the Lortie Commission") made a number of recommendations on this subject in its final report in 1991. Among other things, the Lortie Commission declared that:
Spending limits on individuals and groups are also essential if election outcomes are not to be unduly influenced by independent advertising campaigns.
In 1993, Parliament passed new restrictions on third party spending, limiting third parties to incurring $1,000 in advertising expenses that directly promoted parties or candidates during a portion of the election period. In 1996, this law was struck down as unconstitutional by the Alberta Court of Appeal.
The following year, the Supreme Court of Canada considered third party limits for the first time in the context of restrictions in the Quebec referendum law. In that case, the Supreme Court quoted extensively from the report of the Lortie Commission and endorsed the constitutionality of third party spending limits. The Court stated:
The system set up by the legislature to ensure a certain equality of resources between the options submitted to a referendum and thereby enhance democratic expression would become ineffective if independent individuals and groups were allowed unlimited spending or spending with a ceiling similar to that of the national committees.…
… The evidence also shows that unless inependent spending is controlled, any system for limiting the spending of the national committees would become futile.…
In the context of that decision, Parliament reintroduced third party restrictions to the Canada Elections Act in 1999. Those restrictions set spending limits and reporting requirements on third parties that spent at least $500 on "election advertising", which was defined as:
the transmission to the public by any means during an election period of an advertising message that promotes or opposes a registered party or the election of a candidate, including by taking a position on an issue with which a registered party or candidate is associated.
The constitutionality of the federal law was considered by the Supreme Court in 2004 in the case Harper v. Canada 2004 SCC 33. The Supreme Court upheld the constitutionality of the provisions, stating of the provisions:
By increasing the transparency and accountability of the electoral process, they discourage circumvention of the third party limits and enhance the confidence Canadians have in their electoral system.
The third party restrictions were in place in the 2008, 2011 and 2015 elections. Following the 2015 general election, concerns were raised that third parties, especially foreign funded third parties, exercised an inappropriate influence on the election despite the restrictions in place. In 2018, as Parliament was considering changes to the Canada Elections Act, it was noted that the third party regime was limited to "election advertising," which did not encompass many of the more common modern campaigning techniques, such as websites and text messages.
In the Elections Modernization Act, passed in late 2018, Parliament added to the scope of the third party rules to ensure that they did not only apply to "election advertising," but also to advertising, activities and surveys, both during the election period and in the pre-election period before a fixed-date general election. The definition of "election advertising" from 1999 was maintained in the new regime, which also introduced new concepts of "partisan advertising," "partisan activity" and "election survey." To read more about the existing third party regime, please consult the Political Financing Handbook for Third Parties, Financial Agents and Auditors.
Where can I find more information on the third party regime?
Elections Canada will continue to provide guidance where and when possible, including the Political Financing Handbook for Third Parties, Financial Agents and Auditors.
If you have questions that are not addressed by written guidance, please contact Elections Canada's Political Entities Support Network at 1-800-486-6563.