Political Financing Handbook for Third Parties, Financial Agents and Auditors (EC 20227) – August 2019
7. Interacting with Other Regulated Entities
The Canada Elections Act restricts how third parties can interact with regulated political entities and associated persons. Generally, the Act seeks to ensure that third parties operate independently of other entities to preserve the integrity of the political financing regime.
Specifically, the Act directly prohibits collusion between third parties and regulated entities for the purpose of circumventing the party's or candidate's spending limits, or for the purpose of influencing third parties' regulated activities.
As well, third parties must always be careful not to make ineligible contributions to regulated entities by working too closely with them. Coordination between a third party and a regulated entity that leads to the regulated entity benefiting from a good or service paid for or provided by the third party may result, directly or indirectly, in a contribution.
This chapter explains these prohibitions in greater detail. It covers the following:
- What is collusion?
- Specific prohibitions on colluding with political entities and associated persons
- Risk that coordinated activities will result in a non-monetary contribution
What is collusion?
Collusion is generally an agreement made between two or more people or groups to achieve an objective prohibited by law. The agreement does not have to be made in writing, and may be express or implied.
The Act specifically prohibits certain types of collusion between third parties and regulated entities.
Specific prohibitions on colluding with political entities and associated persons
Specific prohibitions on colluding with a registered party
The third party must not collude with a registered party in order to:
- circumvent the maximum amount that a registered party is allowed for partisan advertising expenses or election expenses, or
- influence the third party in its regulated activities that it carries out during a pre-election period or election period, including by sharing information
Specific prohibitions on colluding with a potential candidate or a person associated with a potential candidate's campaign
A third party must not collude with a potential candidate or a person associated with a potential candidate's campaign (including the official agent) in order to influence the third party in its regulated activities, including by sharing information.
Specific prohibitions on colluding with a candidate or a person associated with a candidate's campaign
The third party must not collude with a candidate in order to:
- circumvent the maximum amount that a candidate is allowed for election expenses, or
- influence the third party in its regulated activities, including by sharing information
In addition, a third party must not collude with a person associated with a candidate's campaign (including the official agent) in order to influence the third party in its regulated activities.
What is collusion for the purpose of influencing a third party's regulated activities?
Any agreement, express or implied, between a party, candidate or potential candidate on the one hand and a third party on the other, that has the objective of influencing a third party's regulated activities, is prohibited by these provisions.
However, where a third party independently engages in activities that result from agreeing with a party's or candidate's platform, this is not collusion. In such a case, although there is agreement on policy goals, there is no agreement about the regulated activities of the third party. In addition, simple communication by a party to a third party of the party's policies or positions on an issue is not collusion, as there is no discussion about the activities a third party should undertake. Mere interaction without a common intent to influence a third party's activities is not collusion.
Each situation must be examined on its own facts.
- A candidate emails a third party with a promotional message and asks it to cut, paste and send the message to voters on its contact list on the Thursday before advance polls. The third party declines the request. Agreeing to send this email would be collusion because the information was shared to influence the third party's regulated activity.
- A candidate emails a third party and asks it to support her campaign. She includes some of her key platform messages in the email. The third party decides that it wishes to support the candidate and does so by forwarding the platform messages to its contact list. This is not prohibited because there was no agreement between the candidate and third party about the third party's regulated activity.
- A registered party meets with a third party to inform the third party of its policy on a particular matter. After the meeting, the third party decides to share this information with voters on its contact list and to run ads supporting the party. This is not prohibited because there was no agreement between the party and third party about the third party's regulated activities.
- A third party is organizing its annual BBQ during the election period. It informs the candidate of the event date in case the candidate or her campaign team wish to attend. This is not prohibited because the event is going ahead without any input from the candidate, and there was therefore no agreement between the candidate and the third party about its regulated activities.
- A third party contacts the registered party to find out where to direct volunteers to help canvass for the registered party. The registered party asks that volunteers contact the party's volunteer coordinator so that they can canvass as members of the registered party's own campaign. If the third party wants to canvass using its own messages and resources, the registered party cannot provide strategic information on where to canvass. This would be collusion to influence the third party's regulated activity.
- A third party contacts a registered party and offers to pay for get-out-the-vote activities if the party is near its limit. The registered party cannot accept this offer. This would be collusion to circumvent the election expenses limit.
- A registered party contacts a third party and provides a list of candidate campaigns that need funds. The third party calls its supporters and asks them to make contributions to these candidates. This is prohibited because the registered party shared strategic information with the third party to influence the third party's regulated activity.
Risk that coordinated activities will result in a non-monetary contribution
Whether outside or during an election, third parties will sometimes conduct activities that benefit a registered party, candidate, registered association, leadership contestant or nomination contestant. As a general rule, if the third party acts independently of the regulated entity, there is no contribution. Rather, the activity is an expense of the third party and is subject to all applicable rules.
However, if the third party works with the regulated entity, the third party activity may be a contribution.
If the third party directly provides goods or services to the regulated entity, this is clearly a contribution. As well, if an activity is coordinated with a regulated entity, the expense that the third party incurs for the activity may be a non-monetary contribution to the entity. Any such contribution will be subject to all the contribution rules of the Act, including the contribution limit and the prohibition on anyone other than an individual who is a Canadian citizen or permanent resident making a contribution.
Note: The following are indicators of what is and is not coordination that results in a contribution being made, but each situation is different and must be evaluated based on all relevant facts. As a best practice, third parties should act independently of regulated political entities to avoid making ineligible or illegal contributions.
The coordination of an activity that benefits a political entity may result in a contribution if the political entity did one or more of the following:
- requested or suggested that the third party undertake the activity
- was materially involved in decisions about the activity
- gave the third party information about the plans or needs of the political entity that influenced how the third party organized or undertook the activity
On their own, the following types of coordination do not result in a contribution:
- the third party publicly endorses the political entity
- the political entity gives the third party information about its policy positions
- the political entity gives the third party publicly available information
- the political entity and third party attend the same event or invite one another's members to an event
Note: In cases where there was no coordination because the political entity was not aware of the activity, or did not act in a manner that would indicate that it accepted the contribution, a third party may nevertheless be contravening the prohibition against circumventing the contribution limits or the restrictions on the source of contributions. This would be the case, for example, if the third party assumed the costs related to the holding of a party’s convention or to carry out a party membership drive, or by agreeing with a landlord that the latter offer the political entity a reduced rent for leased space by having the third party assume part of the costs.
- During the election period, the party leader makes a campaign announcement in a company's factory with employees standing in the background. This is not a contribution. However, if the third party incurs any incremental costs (such as additional security) to hold the activity, the party must pay those costs.
- During the election period, a candidate is invited to address a meeting of a community association or religious congregation. This is not a contribution. However, if the third party incurs any incremental costs to hold the activity (such as catered refreshments that are not usually provided), the party must pay those costs.
- During the election period, a third party decides to hold an event to endorse a candidate. The third party and the candidate decide together on the time and place of the event and work together to establish a speakers list. The cost of the event must be borne by the candidate's campaign (or eligible contributors) as the third party coordinated the organization of the activity with the candidate.
- During the pre-election period, a candidate's official agent asks a third party corporation to use its internal resources to help recruit volunteers for an upcoming event. The third party must not agree to the request. Recruiting volunteers in this way would be a contribution to the candidate.