Ontario Enacts New Third Party Advertising Restrictions In Election Finances Act With Notwithstanding Clause | Blake, Cassels & Graydon LLP
On June 8, 2021, the Ontario Superior Court of Justice overturned recent changes to the Election Finances Act, RSO 1990, c E7 (EFA) which limited third party spending on political advertising and related activities during the 12 months preceding a provincial election.
On June 14, 2021, the Ontario government invoked section 33 of the charter (Notwithstanding the clause) and reintroduced the new third party advertising restrictions, which are now in effect.
The result is that, for the period beginning June 14, 2021 and in the run-up to the next provincial election set for June 2, 2022 (pre-election period), a rigorous third party political advertising regime is in place in Ontario.
THIRD PARTY OBLIGATIONS
Under these rules, third parties are limited to spending a total of CA $ 600,000 on political advertising during the pre-election period. In addition, a third party cannot spend more than CA $ 24,000 in a riding. These amounts increase to C $ 637,200 and C $ 25,488, respectively, in 2022 due to annual indexation.
“Political advertising” includes a wide range of advertisements related to public policy and is not limited to partisan advertisements specifically promoting or opposing a candidate or a party. In particular, this includes “thematic advertising”, which can apply to a wide range of public policy issues associated with a political leader, candidate or party. Therefore, third parties should carefully monitor matters of public policy on which political leaders, candidates and parties take a stand during the pre-election period. Advertisements on public policy topics may initially not be considered by the FTA, but subsequently classified as thematic advertising as the pre-election period progresses. The EFA establishes detailed criteria to help determine if thematic advertising is political advertising.
Third parties must register with Elections Ontario when they incur C $ 500 or more in political advertising expenses during the pre-election period or during an election period, in addition to filing interim returns in some cases. Third parties may not circumvent or attempt to circumvent the maximum amount of the pre-election period expenses, including by dividing into two thirds or more in order to circumvent the maximum amount or by acting in collusion with another third party so that the election period amount exceeds the maximum amount. Courts have interpreted this obligation broadly to mean that “third parties cannot do together what they cannot do alone”.
Violation of the AFE can result in high fines and reputational consequences.
In Working Families Ontario v. Ontario, Justice Morgan of the Ontario Superior Court of Justice ruled that the changes to the FLA infringe freedom of expression and freedom of association under the Charter.
In view of the broad definition of freedom of expression guaranteed by Article 2 (b) of the charter, there was little doubt that the recent amendments to the FTA restricted speech. The question was whether the changes were justifiable limits under Article 1 of the charter. For a section 1 analysis to pass, the test set out in R versus Oakes,  1 SCR 103 must be observed. In the end, the changes to the AFE were deemed to be do not undermine the applicants’ rights to freedom of expression as little as possible. Justice Morgan concluded that the government’s own evidence demonstrated that less damaging measures (i.e., the six-month pre-election period) were both reasonable and available. Therefore, the changes made to the LEF were found to be contrary to Article 2 (b) of the charter and have not been saved under section 1.
Justice Morgan also noted that while the changes to the LEF prevent third parties from undertaking certain activities (for example, bypassing spending limits), they do not prohibit the associative aspect of that activity.
There are still constitutional questions pending under section 3 of the charter with regard to certain provisions of the FTA. Notably, a new section 3 challenge has in fact been launched. We note that the democratic rights set out in Article 3 of the charter are exempt from the application of the notwithstanding clause, which means that if a charter challenge under Article 3 succeed, the provisions of the TFA in question may be declared unconstitutional and set aside. Businesses and organizations that engage in third party activities during the pre-election period should carefully monitor constitutional developments in this regard.