open Secondary menu

Political Financing Handbook for Third Parties, Financial Agents and Auditors – June 2021

To be used for non-fixed-date general elections and by-elections

9. 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

Colluding with a registered party

The third party must not collude with a registered party in order to:

  • circumvent the registered party's election expenses limit, or
  • influence the third party in its regulated activities that it carries out during an election period, including by sharing information

Colluding with a potential candidate or a person associated with their 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.

Colluding with a candidate or a person associated with their campaign

The third party must not collude with a candidate or a person associated with a candidate's campaign (including the official agent) in order to:

  • circumvent the candidate's election expenses limit, or
  • influence the third party in its regulated activities, including by sharing information

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 the collusion 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.

When a third party invites a party leader or candidate to an event, and the invitation can reasonably be seen to have the purpose of promoting their election, the event is regulated. It is either a partisan activity or a contribution to the political entity (see Risk that coordinated activities will result in a non-monetary contribution below).

The event is a partisan activity if the third party organizes it independently and on its own initiative. It is prohibited for a political entity to collude with a third party to influence such an activity, including by sharing information.

Basic communication between a third party and political entity about an event does not affect the third party's independence and does not amount to collusion. The third party can seek agreement about logistics (date, time, and the party leader's or candidate's topic), provided that these communications are not strategic discussions to maximize the benefit to the political entity's wider campaign. The third party can also inform the political entity about the venue, audiovisual equipment, other speakers and the audience.

Each situation must be examined on its own facts.

Examples
  1. 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.
  2. 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 to influence the third party's regulated activity.
  3. 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 to influence the third party's regulated activities.
  4. A registered party asks a social media influencer (who, as any other individual, is a third party) for a free endorsement during the election period. The influencer asks the party what they would like the endorsement to say and when it should be posted. An influencer is permitted to post their personal political views without it being election advertising. However, the registered party cannot share information about their preferred content and timing. This would be collusion to influence the third party's regulated activity. If the registered party wants to direct the content and timing, it must pay the influencer as an advertiser or accept the commercial value of such an advertisement as a non-monetary contribution (if the influencer is an eligible contributor).
  5. A third party is organizing its annual BBQ during the election period. It informs a local candidate of the event date in case they wish to attend. The candidate decides to show up and gives a short, informal speech. This is not prohibited because there was no agreement to influence the third party's regulated activities.
  6. 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.
  7. During an election period, a labour union holds a members' meeting on the next round of collective bargaining. The union invites a party leader whom it supports to address members for 15 minutes, but there is no coordination beyond the non-strategic basics of the event time and topic. This is not prohibited because basic communication about the event is not an agreement to influence the third party's regulated activity.
  8. 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.

OGI reference

For a detailed discussion of this topic, please refer to Elections Canada's interpretation note 2021-01, Participating in Third Party Campaign-Style Events During Pre-election and Election Periods, on the Elections Canada website.

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.

When a third party invites a party leader or candidate to an event, and the invitation can be seen to have the purpose of promoting their election, the event is regulated. It is either a partisan activity (see Specific prohibitions on colluding with political entities above) or a contribution to the political entity.

The event is a contribution if:

  • it is held on the registered party's or candidate's initiative, or
  • there is coordination with the registered party or candidate that suggests the third party is not acting independently

Where an event is a potential contribution, if the third party is not an eligible contributor or is an individual who would exceed their contribution limit, they must be contracted as a supplier in advance and invoice the registered party or candidate for the amount that would otherwise be a contribution.

Examples
  1. During the election period, a party leader requests to make a policy statement in a company's factory with employees standing in the background. The company agrees. As the event is being held on the registered party's behalf, it results in a potential contribution. The company must invoice the registered party for the commercial value of property and services it provided for the event so that it does not make an illegal contribution. That amount is also an election expense of the registered party. As the commercial value of using part of the factory floor as a meeting space is not ascertainable, it is not included in the calculation.
  2. During the election period, a third party organization decides to hold an event to endorse a registered party. The third party and the party work together to arrange the time, place, speaking points and guest list. Given this coordination, the event results in a potential contribution. The third party must invoice the registered party for the commercial value of property and services it provided for the event so that it does not make an illegal contribution. That amount is also an election expense of the registered party.
  3. During the 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.

OGI reference

For a detailed discussion of this topic, please refer to Elections Canada's interpretation note 2021-01, Participating in Third Party Campaign-Style Events During Pre-election and Election Periods, on the Elections Canada website.