Show Me the Money: Contributions and Doing Business During an Ontario Election

Show Me the Money: Contributions and Doing Business During an Ontario Election

Ontario Provincial Election 2022 Edition

Doing Business during an Election

Public discourse and civic participation take many forms during an election. Among other things, individuals may choose to donate to a political party, third parties may run advertising campaigns, and grassroots organizations may lobby candidates and political parties to adopt their preferred policy positions. There are rules that carefully govern these activities in Ontario and interactions between political entities and stakeholders – whether it be individuals or organizations.

In this article, as part of TRC-Sadovod LLP’s ongoing coverage of this year’s Ontario provincial election, we discuss the Election Finances Act, how elections are funded, and other important considerations when doing business during an election. Ontario’s provincial election is likely taking place on June 2, 2022. The election period begins at 12:01 AM on the day the writ of election is issued, running until the last polling day.

Contributions

Political parties, nomination contestants, registered candidates, and leadership participants all rely on monetary and non-monetary contributions to finance their campaigns.

Contributions can only be made by eligible individuals. Donations from corporations, trade unions, registered charities, unincorporated associations and groups, are not permitted. The source of contribution funds cannot be from outside of Ontario. Eligible individuals are either persons normally resident of Ontario or the estate of a deceased person.[1]

For monetary contributions, individual donors must use their own funds, and their contributions are subject to strict limits.[2] In the 2022 calendar year, eligible individuals are subject to a maximum contribution limit of $3,325, when donating, as follows:

• The maximum contribution amount to each registered political party in Ontario;
• Contribution(s) to an association and/or nomination contestant, or several associations and/or nomination contestants, totaling the maximum contribution amount, for each political party;
• The maximum contribution amount to all registered candidates of each political party;
• The maximum contribution amount to all registered independent candidates; and
• The maximum contribution amount to an individual leadership contestant in the leadership contest of a registered party.[3]

How does this work in practice?

For example, an individual eligible donor, if they so choose, could give $3,325 to every single political party. The donor could also give a total of $3,325 to one or several nomination contestants or electoral associations from the same political party; they could then donate a maximum of $3,325 in the same way for every other political party. The donor could also give up to a total of $3,325 to a registered candidate, or multiple candidates, from the same political party; they could then do the same for the registered candidate(s) of every other political party. If they wanted to support non-party affiliated candidates, they could also contribute a total of $3,325 to all such non-party candidates. Finally, the donor could also contribute $3,325 to each leadership contestant of a registered party.[4]

Cash contributions cannot exceed $25,[5] and for any contribution of greater than $200, Elections Ontario will publish the donor’s name and contribution amount. Political entities cannot accept anonymous donations.[6]

Non-Monetary Contributions

Non-monetary contributions typically consist of goods and services that campaigns need during the course of an election. However, non-monetary contributions can take many forms. For example, the Election Ontario considers cryptocurrency to be a form of non-monetary contribution as well.[7]

Political entities will frequently contract with vendors providing goods, such as campaign signs, leaflets, office supplies, and those providing services, such as polling, phone banking, and consulting. Individuals and organizations contracting with political parties must be aware that if an agreed upon contract price is different from fair market value for a good or service, the price differential will be considered a campaign contribution. For example, if a campaign rents an office below fair market value, the individual or corporation leasing the premises may be offside with election laws – an individual because of their personal contribution limits, a corporation because they would be making a campaign contribution.

Hosting a campaign event for a candidate or serving as a stop on a party leader’s election tour? To avoid making an illegal non-monetary contribution, corporations, trade unions, registered charities, unincorporated associations and groups need to ensure campaigns or parties pay fair market value for costs associated with the event. For example, if a manufacturer rents audio-visual equipment specifically for an event at their facility, they must be reimbursed the cost of the rental by the campaign, which must account for it as an election expense.

Goods and services valued at less than $100 may not be considered a contribution, but it is always better to err on the side of caution.

Third Party Contributions

To influence public policy and opinion, third parties frequently participate in the political process as well. Third parties are broadly defined as persons or entities other than a registered candidate, registered constituency association, or registered party.[8]

There are fewer restrictions on making third party contributions than those governing contributions to political parties and candidates. Third parties can accept contributions from individuals normally resident of Ontario, corporations operating in Ontario that are not registered charities, and trade unions.[9] There are no monetary or non-monetary limits on the amount that can be contributed to third parties, but the donations cannot be anonymous;[10] all contributions over $100 are reported to Elections Ontario and subsequently published.[11]

Third parties must register with Elections Ontario immediately after spending $500 or more on advertising during an election period or in the twelve months before a general election.[12] To register, third parties must appoint a CFO; appoint an auditor if the third party intends to spend, or does spend, $5,000 or more on political advertising;[13] and submit the requisite application form.[14]

TRC-Sadovod LLP has prepared a separate article on third parties, with a focus on third party advertising, that is available here.

There are many considerations when participating in an election, be it as an individual, lobbyist, third party organization, or political entity. It is important to ensure compliance and work with qualified professionals that can assist you and your organization in navigating applicable lobbying and election finance laws.

The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.

[1] EFA 16(3), 29(1)
[2] EFA 19(1)
[3] EFA 18(1)
[4] EFA 18(1)
[5] EFA 16(2)
[6] EFA 17(2)
[7] CFO Handbook for Political Parties at p. 36
[8] EFA 1(1)
[9] EFA 37.10(1)
[10] EFA 37.10(2)
[11] EFA 31.12(4)
[12] EFA 37.5(1)
[13] EFA 37.7(1)
[14] EFA 37.5(2)

by Timothy Cullen and Jeremiah Kopp

A Cautionary Note

The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.

© TRC-Sadovod LLP 2022