Most readers of this newsletter are well aware of the limitations which are placed on political activities by charities and in recent issues we have run a couple of articles on various aspects of this subject.
The best explanation of what is or is not allowed will be found in the CRA’s document, CPS-022 which can be found on their web site. Our own view is that this document is quite generous in its interpretation of the law…at least compared to the very narrow former interpretations and compared to what the Federal Court of Appeal has adopted as its test.
But that having been said, all readers are more than well aware of the fact that scores of audits have been undertaken by the CRA revolving around alleged breaches of the political activities guidelines.
We would stress that for non-profits which are not charities, there are no particular limits to their political activities if an election has not been called. So the recent advertising campaign against Justin Trudeau and the Liberals on the issue of abortion, run by a collation of non-profits does not contravene any rules. But if as and when an election is called, it is a whole new ball game for all categories of organizations.
When an election gets underway there is a second set of rules which come into play…those of the federal and provincial Elections Act.
But it is worth noting that at least during election charities and other organizations are subject to quite a different set of tests and criteria because of the Election Act’s limitation on Third Party advertising. An organization which wishes to make statements during an election should be aware of the provisions, should be aware of the need to register with the Chief Electoral Officer and the disclosure rules including, in most cases, disclosure of donors.
The election Act rules of course apply to all organizations which are not political parties. Thus, charities which have created non-profits to pursue a political agenda outside the charity rules should be aware that the Election Act provisions apply to them even though the CPS-022 rules and the Income Tax Act provisions on political activity do not.
The following comments are taken from the Chief Electoral Officer’s web site, but we caution that this material is in non-technical language and legal advice should be sought before making judgements about whether an organization must register and must comply. We would also note that these comments were written with the 2011 federal election looming. The numerical figures used may be somewhat higher when an election is called by are current foir the first quarter of 2015.. Presumably, an announcement about the operative figures will be made when the election is actually called.
The main definition is in fact “election advertising”, which is very broad.
“Election advertising” is defined in section 319 of the Canada Elections Act. “Election advertising” may be interpreted as a message that is:
“election advertising” means 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 one that takes a position on an issue with which a registered party or candidate is associated. For greater certainty, it does not include
- (a) the transmission to the public of an editorial, a debate, a speech, an interview, a column, a letter, a commentary or news;
- (b) the distribution of a book, or the promotion of the sale of a book, for no less than its commercial value, if the book was planned to be made available to the public regardless of whether there was to be an election;
- (c) the transmission of a document directly by a person or a group to their members, employees or shareholders, as the case may be; or
- (d) the transmission by an individual, on a non-commercial basis on what is commonly known as the Internet, of his or her personal political views.
We would note that one area which can create serious problems for third party organizations may be their web sites. It is abundantly clear that posting material on a web site would fall under the definition of “election advertising” during a federal campaign. It is also quite clear that the CRA and likely the Chief Electoral Officer monitor web sites in cases where they think there may be a problem.
The 2011 comments continues:
“However, the above should be interpreted as a general guide. The actual definition of “election advertising” should be reviewed in order to determine if any particular message would constitute election advertising for the purposes of the Canada Elections Act.”
So the first “test you have to consider is whether any particular communication would fall into the category of “election advertising”. If it does, the third party rules come into play. The numbers in the square parentheses are section number under the Canada Election Act.
“A third party is a person or group other than a candidate, registered political party or an electoral district association of a registered political party. The following obligations apply to third parties:
- Any third party, immediately upon incurring $500 in election advertising expenses after the issuance of the writ, must register with Elections Canada [s. 353].
- All third parties must identify themselves on their election advertising and state that the ad was authorized by the third party [s. 352].
- Third parties must appoint a financial agent to accept all contributions for election advertising purposes and authorize all election advertising expenses on behalf of the third party [ss. 354, 357].
- Third parties that spend $5,000 or more on election advertising must appoint an auditor [ss. 355, 360].
- Third parties must not use anonymous or foreign funds for their election advertising [ss. 357, 358].
- Third parties will have to report the details of their election advertising expenses within four months after election day [s. 359].
- Third parties must not incur election advertising expenses of a total amount of $201,900 during an election period in relation to a general election, and not more than $4,038 of that amount may be incurred to promote or oppose one or more candidates in a given electoral district [s. 350].
- Third parties must not circumvent or attempt to circumvent the spending limits [s. 351].
- Third parties will have to report who contributed money to the third party for election advertising purposes in the period beginning six months before the issue of the writ and ending on election day [s. 359]. (Editor’s note: This would seem to be in conflict with the confidentiality provisions of the Income Tax Act and thus there is a very real legal question as to which of the two federal statutes will apply.)
- Third parties, political parties and candidates must not transmit election advertising to the public on election day [s. 323]. “
For further information on the definitions of “third party” and “election advertising”, and other matters relating to third parties, you should check out the web site at www.elections.ca.
Depending upon the circumstances and the offences, the penalties for contravention of the rules may include both prison time and substantial fines. Where the spending limits have been contravened, the fines can range to as high as five times the excess amount spent.
So the message is that organization which want to have their voices heard not only have to adhere to the general rules applicable to political activity under the Income Tax Act but also to the rules under the Elections Act though the rules and applications do not necessarily jibe.
We would also note that there will be several provincial elections held in Canada in 2015 and each province has its own version of the Elections Act which may set out rules for third party participation.
Given the current intense concern at the federal level about third party political advocacy, all organizations and particularly charities which want to be heard during an election should certainly familiarize themselves with the Election Ac t rules as well as, of course, the ongoing CRA interpretation of political activities.