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Canadian charities will be aware that there is now no limit on the resources a Canadian charity can devote to “Public Policy Dialogue and Development Activities” (PPDDAs). PPDDAs are non-partisan activities a charity carries on to participate in the public policy development process or to facilitate the public’s participation in that process. As part of these activities, a charity may wish to use some of its resources for lobbying or election advertising.
Not-for-profits (NPOs) that are not charities have, of course, always been free to engage in lobbying and advocacy as a means of advancing their purposes. Those activities are subject to specific legal rules that must be observed by charities and NPOs. The lobbying rules that apply to your organization will depend on whether you are lobbying federal, provincial or municipal office holders. Election advertising rules will depend on where you are and whether an election is imminent.
What is lobbying?
Lobbying refers to certain types of communicating, for remuneration, with a public office holder. Lobbyists are required to register, and to report their activities so the public can be aware of who is seeking to influence public office holders.
Lobbying of federal public office holders is regulated by the federal Lobbying Act (the “Act”), administered by the Office of the Commissioner of Lobbying of Canada (the “Commissioner”). Equivalent provincial legislation governs lobbying of provincial government officials. This discussion provides an overview of the federal lobbying rules; if you intend to lobby at the provincial or municipal level, you should seek advice about the rules that apply in your area. The general principles are very similar across Canada, but the details vary from province to province.
Municipal governments are not directly covered by either federal or provincial lobbying regulations, but some municipal governments have established their own lobbyist. For example, Toronto has established its own Office of the Lobbyist Registrar.
The definition of lobbying in the Act includes communicating with a public office holder in respect of legislation, regulations, policies or programs, or the awarding of any grant, contribution or other financial benefit. It does not just include meetings and submissions to office holders; it also includes attempting to arrange a meeting between a public office holder and any other individual for the purpose of lobbying.
A public office holder includes virtually any federal government employee, including MPs and Senators, public servants appointed by a minister or the cabinet, officers, directors or employees of any federal board, commission or tribunal, a member of the Canadian armed forces or a member of the RCMP.
Submitting a bid or application for a grant is not lobbying, but it is lobbying if you set up a meeting outside that process in an attempt to influence the outcome of the bid. It is also not lobbying to communicate with the public office holder simply to introduce the organization without any “ask”.
If contact is initiated by the public office holder, that interaction does not count as lobbying under some provincial legislation; but the Act treats as lobbying any paid communication with a public office holder regarding prescribed subject matters, regardless of who initiates it.
Your NPO does not have to engage directly with public office holders to be caught by the Act. The Commissioner says that “grass roots lobbying” happens when a person tries to persuade members of the public to communicate directly with a public office holder to pressure the public office holder to endorse a particular opinion. So if you invite the public to write to their Members of Parliament about an issue, you may be lobbying.
Who is a lobbyist?
Anyone who is paid to lobby is included in the definition of lobbyist. There are two types of lobbyists: consultants and in-house lobbyists. Volunteers are not required to register as they are not paid to communicate with public office holders.
If a charity or NPO engages an outside firm to deal with governmental relations, then that firm will be a consultant lobbyist. Hiring a consultant lobbyist does not require a charity or NPO to register or do anything else; that is the responsibility of the consultant.
In-house lobbyists communicate with public office holders on behalf of the organization that employs them.
Responsibilities of NPOs with in-house lobbyists
The first obligation of an NPO with one or more in-house lobbyists is to register with the Office of the Commissioner of Lobbying of Canada. If you have not been registered before, you have two months from the date on which your organization meets the registration threshold.
Under the Act, registration is required when one or more of the organization’s employees lobby public office holders and the cumulative lobbying activities of all employees constitute 20% or more of one person’s duties over a period of a month.
The most senior paid employee of an organization is legally required to ensure that employees who lobby federal office holders on the organization’s behalf are informed of their obligations under the Lobbying Act and the Lobbyists’ Code of Conduct.
If an in-house lobbyist is a former public office holder, that fact must be declared. Some former public office holders are subject to a cooling-off period during which they may not lobby, either as consultants or as in-house lobbyists.
After its initial registration, the organization is required to file regular reports disclosing its lobbying activities.
Consequences of Non-compliance
The Act provides for penalties for lobbyists who are found guilty of failing to register or making false or misleading statements in any document submitted to the Commissioner. The maximum penalties are a fine not exceeding $200,000 or imprisonment for a term not exceeding two years, or both. The Commissioner may also impose a prohibition on lobbying for up to two years on anyone convicted under the Act.
A charity may not engage in any partisan political activities, which means those that directly or indirectly support or oppose a candidate or party. A charity may, however, carry out PPDDAs that support or oppose a law, policy or decision of government that a political party or candidate also supports or opposes. A charity can do this at any time, inside or outside of an election period, as long as in doing so the charity does not refer to, or otherwise identify, the political party or candidate.
However, CRA takes the view that a charity may be indirectly supporting a party or candidate if, for example, it chooses to oppose a candidate by carrying out activities that target the candidate’s riding but do not mention the candidate by name.
Equally, a charity could be viewed as indirectly supporting a party by publishing research materials that offer evidence and arguments in favour of the party’s position on an issue, without ever referring to the political party in the charity’s public materials.
An NPO that is not a charity is not restricted and may engage in partisan political advocacy if that is consistent with its purposes.
Canada Elections Act
Any organization, including a charity or NPO, may be required to comply with the applicable election legislation if its advertising during an election period could be regarded as directly or indirectly supporting or opposing a candidate or political party.
The Canada Elections Act (the “Elections Act”) defines election advertising to include any advertising message transmitted to the public during an election period that promotes or opposes a registered party or candidate, including one that takes a position on an issue with which a registered party or candidate is associated (“issue advertising”). If your organization wants to communicate with the public on such an issue, you may be regarded as a third party advertiser even if your communications are not explicitly linked to any party.
Provincial laws also regulate advertising during election periods. These laws apply to provincial elections and also to local elections, such as municipal elections. If your organization is communicating to the public in a provincial or local election campaign period, make sure you obtain advice about how to comply with the rules that apply in your area.
Under the Elections Act, the election period means the period beginning with the issue of the writ and ending on polling day. The polling date for the 2019 federal election is scheduled for Monday, October 21; the election period will begin 36 to 51 days before that date, depending on when the writ is issued. Before that period, issue advertising is not election advertising and is not regulated by the Act. Partisan political advertising is always regulated by the Election Act, even outside the election period.
Election advertising includes: signs, newspaper ads and other print media; radio and TV ads; and election messages posted online that have a placement cost. It does not include: telephone calls, texts or emails; messages posted on social media platforms (such as a video posted on YouTube or messages posted on Facebook or Twitter) for which there is no placement cost; content posted on your organization’s website; transmission of an editorial, debate, speech, interview, column, letter, commentary or news; or door-to-door canvassing, unless canvassers distribute election advertising such as pamphlets.
The Act regulates third party advertising, limiting it to $4,224 per riding and $211,200 in total for a federal general election. Third parties must register immediately after incurring election advertising expenses totalling $500. They must appoint an auditor if their election advertising expenses exceed $5,000.
Four months after election day, a third party must file a Third Party Election Advertising Report. It includes details on: contributions given and loans obtained for election advertising purposes; how much of its own funds the third party used; and details on election advertising expenses.
The Canada Elections Act also regulates both monetary and non-monetary contributions made by third parties to a candidate or party. In general, anything resulting in an expense that would not normally be incurred by a third party will be treated as a contribution if it is not paid for by the candidate or party. For example, if a candidate appears at the offices of an NPO to address a meeting or to make a campaign announcement regarding a policy issue linked to the work of that NPO, any associated costs of additional security or refreshments may be treated as a contribution if they are not paid for by the party or candidate.
Miller Thomson lawyers have experience helping charities and NPOs with a broad range of legal matters, including tax matters. If you need legal advice for your charity, not-for-profit or social enterprise, contact the Miller Thomson Social Impact group.