What you need to know about political events and non-monetary political contributions
The much-anticipated 2021 federal election is underway. If you or representatives of your business plan on getting involved in the lead up to election day on September 20, you should consider the federal political contribution rules before making an appearance at the next political event.
This election law primer is intended to convey some important considerations with regard to non-monetary political contributions. It is intended as general guidance only. If you have any specific questions or concerns, please contact Awanish Sinha, Hartley Lefton, Amanda D. Iarusso, Jacob Klugsberg, Andrew Butler, or Adam Kanji of our firm’s Public Sector. We would be pleased to assist you.
What counts as a political contribution?
Contributions can take many forms.
The Canada Elections Act creates a near-absolute prohibition on federal political donations by corporations and trade unions. Only individual Canadian citizens and permanent residents are permitted to “make a contribution to a registered party, a registered association, a nomination contestant, a candidate or a leadership contestant”.[1] Contributions are limited to $1,650 per person to each political party and $1,650 in total to candidates or riding associations.[2] For more information on contribution limits and political financing generally, see another related blog post here.
Contributions can be both monetary and non-monetary. Non-monetary contributions are defined as:
the commercial value of a service, other than volunteer labour, or of property or of the use of property or money to the extent that they are provided without charge or at less than their commercial value.[3]
Providing goods or services directly to a party, candidate, or leader qualifies as a non-monetary contribution, and the prohibition and spending limits above apply to this scenario. But in some cases, activities that promote political parties or candidates can constitute non-monetary contributions as well.
A key example of such an activity is organizing an event for the benefit of a political actor. If you coordinate with a political actor to organize an event motivated by the election or in order to promote the political actor, any expenses associated with the event not billed to the political actor will be considered contributions. On the other hand, if you organize an event independently of a political actor, this will be considered a “partisan activity”, not a contribution.[4] Note that certain events, such as a political debate or a series of discussions with different candidates, are excluded, and organizing such an event—even in coordination with a political actor—likely would not count as a contribution.
To ensure you comply with the Canada Elections Act, understanding what counts as “coordination” is key. Coordination is indicated, for example, when a political candidate suggests that you plan the event; is materially involved in decisions about the event; provides information about their campaign plans; or influences how you organize the event.[5] Coordination is not necessarily indicated simply by speaking about logistics with the political actor (i.e., discussions about the event time, date, venue, etc.).[6]
Because corporations and other types of organizations are prohibited from making political contributions, these entities must invoice the political actor for events or activities planned or undertaken that constitute non-monetary contributions. This involves determining the commercial value of the property or services provided as part of the event or activity. All elements of the event or activity must be taken into account, such as the costs associated with:
· logistics planning;
· advertising or promotion;
· physical set-up;
· use of the space; and
· attendance on company time of employees of the organizer.
The latter two points bear additional discussion. If an event is planned to take place in a space typically available for event rental, the commercial value of the use of the space should be calculated and invoiced to the political actor. However, where the commercial value of using the space as a meeting place or event space is not ascertainable, it likely does not need to be included in the calculation.[7]
Finally, if you pay your employees—directly or indirectly—for their attendance at your (or any) political event, this too likely must be calculated as part of the non-monetary contribution. Take the example of United Association Local 527 in the 2015 federal election. The union paid 23 of its members $100 each to attend and stand behind a party leader at a political event. The Commissioner of Elections Canada launched an investigation into the union’s conduct, finding that this expenditure of $2,300 was an illegal contribution.[8] The union entered ultimately entered into a compliance agreement with the Commissioner to resolve the matter.
The Bottom Line
It is important for businesses and their employees to stay informed about the rules that govern their interactions with political entities, which are ultimately aimed at promoting transparency and trust in our democratic institutions.
If you or others in your organization will interact with political parties, candidates, or leaders in anticipation of the upcoming federal election, take the time to ensure that your internal policies and procedures comply with the above-noted elections laws, including those outlined above.
This post is part of our 2021 federal election series. You can access related content here.
Our Public Sector experts at McCarthy Tétrault LLP can help. Please contact Awanish Sinha, Hartley Lefton, Amanda D. Iarusso, Jacob Klugsberg, Andrew Butler, orAdam Kanji
Authors: Awanish Sinha, Hartley Lefton, Amanda D. Iarusso, and Andrew Butler
[1] Canada Elections Act, S.C. 2000 c. 9, at s. 363(1).
[2] Elections Canada, Limits on Contributions.
[3] Canada Elections Act, supra at s. 2(1).
[4] Partisan activities may be subject to their own, separate reporting requirements and spending limits. Where applicable, the limit for the current election period is $700,000. SeeCanada Elections Act, supra at s. 349.1(1).
[5] Elections Canada, “Political Financing Handbook for Third Parties, Financial Agents and Auditors” (June 2021), online: https://www.elections.ca/pol/
[6] Elections Canada, “Participating in Third Party Campaign-Style Events During Pre-election and Election Periods” (May 2021), online: https://www.elections.ca/res/
[7] Ibid.
[8] CBC News, “Waterloo union admits to paying workers to be props at Trudeau election event” (January 28, 2016), online: https://www.cbc.ca/news/
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