A new advocacy chill? The Election Finances Act

The Government of Ontario recently reintroduced The Election Finances Statute Law Amendment Act (Bill 2 – formerly Bill 201), which changes the rules for provincial election financing. We don’t disagree with Bill 2’s stated intent. To reduce the influence of powerful third-party spenders in elections is a good thing. Democracy can be subverted when there is too much influence from wealthy third parties on politics. Yet, Bill 2 in its current form would place unreasonable limits on democratic speech for nonprofits, stifle voices not often heard during public debate in election periods, and add to the administrative burden placed on nonprofit organizations.

Nonprofits caught up in the definition of “political advertising”

Bill 2 includes not only partisan, but also issue-based advocacy in its definition of political advertising. This creates unintended consequences for nonprofits that participate in democratic debate during election campaigns. Nonprofits play a vital role in bringing the voices of communities to public discourse, especially those from marginalized communities. Hearing from diverse groups of people helps political candidates better serve their constituents.

Unlike those who seek to influence elections for private gain or corporate profit, the nonprofit sector shares and amplifies nonpartisan information and fosters discussion about issues important to communities. Nonprofits shouldn’t have to register simply to enable community voices to be heard.

Bill 2 doesn’t align with recent legislation on third-party advertising

There’s a discrepancy between the definition of political advertising in Bill 2, and the definition of third party advertisement in the Municipal Elections Modernization Act (Bill 181), adopted by the Ontario Legislature in the Spring session.

When Bill 181 was presented to the Legislature at First Reading, it included a definition of political advertising that encompassed both partisan and issue-based advertising. However, after hearing the concerns of community nonprofits that saw it as their right and responsibility to participate in public policy debates during municipal elections without having to take the onerous step of registering and reporting, the Standing Committee on Finance and Economic Affairs elected to remove issue-based advertising from the scope of the definition.

Bill 2 needs to reflect these concerns and align with this new Act.

We don’t need another “advocacy chill”

Canadian charities recently breathed a collective sigh of relief when the Government of Canada announced it would no longer conduct audits of registered charities’ political activities. Even though nonpartisan policy advocacy is a legitimate activity for charities (up to a certain threshold), many decided not to engage in public policy for fear of being offside with federal regulators. For those who were caught in the Canada Revenue Agency net, the consequences were devastating because of the significant staff time and resources it cost to perform the audits.

The nonprofit sector in British Columbia has been going through an even colder chill since 2009, when its provincial government introduced election advertising rules similar to the provisions in Bill 2. The rules created confusion and anxiety for “small spenders” during the subsequent provincial election. Some organizations censored themselves to avoid the risk of being labelled a “third-party advertiser” under the new law. They were concerned their low-cost advocacy activities – even maintaining their websites – could net them fines if they didn’t register. This BC law is currently undergoing a constitutional challenge before the Supreme Court of Canada.

Nonpartisan public policy advocacy is NOT “third-party political advertising”

If Bill 2 is passed in its current form, nonprofits would have to register as third-party political advertisers if they spend over $500 engaging in public policy debate on issues that a candidate happens to address during the prescribed election period.  

The definition of political advertising not only includes billboards and newspaper ads, but also “other media” such as flyers, buttons, and e-newsletters. Any communication from a nonprofit that has a cost falls under this definition, if the audience goes beyond an organization’s staff and membership list. A nonprofit that promotes awareness of a public policy issue with non-members, such as donors or the general public, could have its communications deemed to be third-party political advertising. This would apply to many issues, including child care, affordable housing, arts and recreation funding, and climate change – issues candidates routinely take a position on.

The fact that a candidate or party has taken up an issue is an arbitrary reason to require nonprofits to register during an election campaign. As Ontario’s Chief Electoral Officer has argued, “If there is an issue-advocacy group that is advocating for an issue…there shouldn’t be restrictions on that.”

Adding to the administrative burden for nonprofits

There may be some who would argue it’s no great imposition for nonprofits to have to register with the Chief Electoral Officer if they want to engage in political communications during election campaigns. Registration, however, is only the beginning of what Bill 2 would require of nonprofits.

Unlike campaigns that exist only during election windows and for one purpose, community nonprofits would have to track those donations supporting their public policy work during an election campaign separately from donations made for other purposes, or for public communication outside election windows. Nonprofits would also have to file a special set of financial statements for donations and election-related expenses with the Chief Electoral Officer, and risk incurring fines if any of this isn’t done correctly. For a community group that simply wants to raise awareness of local or provincial issues, these requirements would be a significant barrier to participation in public policy debate.

This is in stark contrast to the Ontario government recognizing the need to reduce the administrative burden for nonprofits. Bill 2 would impose yet another mechanism for nonprofits to register, track and report on their financial activities on top of existing requirements under provincial legislation and federal regulations.

How to fix this

There are excellent alternatives to enable the Ontario government to achieve its policy objective of reducing the influence of money in politics, without hampering the work of nonprofits:

1. Refine the definition of “political advertising” in Bill 2 so that it excludes all nonpartisan issue-based political communications, whether or not the position taken in the communications can “reasonably be regarded as closely associated with” a party, leader, or candidate. This would align Bill 2 with the definition of “third-party advertising” in the recently passed Municipal Elections Modernization Act.

2. Failing that, increase the “small spender” cap from $500 to $1000 to align with Elections Canada rules.

Nonprofits play a vital role during election campaigns. They should be empowered to speak as key pillars in the democratic process because they broaden the dialogue to include the views of people whose needs and priorities are not always visible nor heard in public policy debate. For this nonpartisan work to fall under the banner of political advertising is a misrepresentation of the role of civil society. There are ways the Ontario government can reduce the influence of money in politics without silencing community nonprofits.