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Campaign finance reforms put to the test

Speaker's Corner

Ontarians will go to the polls June 7 for a provincial general election. This election is noteworthy as the first to be conducted under a vastly reformed regime of campaign finance that took effect in January 2017, with the coming into force of The Election Finances Statute Law Amendment Act, 2016. Under this new regime, among the important developments is spending limits for third parties that engage in political advertising both during and outside election periods. Coupled with these reforms are the regulation of political advertising by political parties outside an election period and the banning of campaign contributions by corporations and unions.

One of the broad objectives of the legislation is to “level the playing field” (in the words of Ontario Attorney General Yasir Naqvi) between political parties and candidates on the one hand and third parties on the other. Another broad objective is to increase transparency in the financing of campaigns. These reforms are also said to address a perceived need to bring campaign finance rules in line with the fixed-date election schedule prescribed in the Elections Act.

Lawyers need to be aware of these changes because they risk imposing limits on political expression. One can point, for example, to third parties that engaged in purely issue advocacy that happens to be associated with a political party, its leader or a candidate, whether during or outside of an election period. They may now be subject to a broader regulatory scheme that will require registration with and imposes financial reporting obligations to Elections Ontario upon spending $500 in political advertising.

Under the Election Finances Act, third parties are groups or individuals that are neither political parties nor candidates that engage in political advertising to support or oppose a political party, its leader, its candidates or the issues with which they are closely associated. Before the legislative reforms, third parties were not subject to the same degree of regulation as political parties and candidates, with an unlimited ability to raise and spend funds and without any reporting obligations for non-election-period spending or fundraising. Meanwhile, political parties had been subject to substantial regulation, including spending limits and contribution limits and regular reporting of their sources of contributions.

Under the new spending limits, a third party can spend up to $101,800 on political advertising during an election period. In the six-month pre-election period commencing Nov. 9, 2017, they can spend up to $610,800 on political advertising. For political parties, the spending limit on political advertising during the pre-election period is $1,018,000. The limit during the election period would be upwards of $7.5 million if a political party endorses candidates in each electoral district. This is in addition to a separate spending limit applicable to individual candidates.

These fundamental changes have important implications for third parties. They are now subject to greater restrictions on their rights of participation in the political process both during and in the six-month period preceding an election. Unions and corporations are particularly affected since political advertising will be one of the few means by which to participate in the political process, given the ban on union and corporate contributions.

In addition, an expanded definition of political advertising means that the new spending limits, along with the registration and reporting obligations, will be triggered if the political advertising supports or opposes issues with which a political party or candidate is closely associated or supports or opposes a party leader.

Political advertising is one of the few means now available to non-individuals to participate in the political process, particularly with the prohibition against corporations and unions financially contributing to political campaigns. Not only does the legislation now impose spending limits during an election period, third parties are also subject to limits during what is arguably a lengthy non-election period.

The notion of a level playing field has deep roots in Canadian electoral law. It is closely tied to concerns about the undue influence of private money in political campaigns, concerns expressed by the Royal Commission on Electoral Reform and Party Financing. Its 1991 report has provided the inspiration for many campaign finance reforms enacted in Canadian jurisdictions.

The Supreme Court of Canada, for its part, was guided by the commission report in developing its conception of electoral fairness as requiring a level playing field between the various participants in the electoral process. Applying this principle, the court upheld the limits on third-party election advertising as justifiable infringements of s. 2(b) (freedom of expression), s. 2(d) (freedom of association) and s. 3 (voting rights) of the Canadian Charter of Rights and Freedoms (Harper v. Canada (Attorney General), 2004 SCC 33). To be clear, the legislation at issue here did not limit non­election political advertising.

As for the fixed-date election regime, since 2005, Ontario’s Election Act has prescribed a general election every four years, subject to the lieutenant governor’s discretion to dissolve the legislature before the scheduled date. Where there is an expectation of a specific date for an election but no election writ is issued, political spending can become, in effect, unregulated, unlimited election spending.

Are these objectives sufficiently important? Is there evidence of harm to the electoral process to justify limits of this nature on democratic rights? Attempts in one Canadian jurisdiction — British Columbia — to impose pre-election spending limits on third parties have not survived a challenge under the Canadian Charter of Rights and Freedoms.

Unions in Ontario have already signaled an intention to bring a similar challenge. In the meantime, third parties should be cautious in their political advertising expenditures during this pre-election period and take measures to ensure they comply with registration and reporting requirements.

Sebastian Spano practises civil and public law litigation in Ottawa. He maintains a keen interest in political financing, ethics and conflict of interest and lobbying. He may be reached at Sebastian.spano@spanolaw.ca or at 819-664-7448.

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