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Attendance at Political Fundraising Events is Subject to Lobbying and Ethics Laws

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Lobbying Law Bulletin

Political fundraising events are common in many Canadian jurisdictions. Despite their popularity, there is widespread misunderstanding of how the arrangement of those events, and the conversations that occur there, are affected by laws on lobbying and public-sector ethics.

Those who attend political fundraising events, as well as the organizers and ticket sellers, must take steps to ensure that their conduct before, during and after the events is fully compliant with lobbying law and other applicable rules.

Talking to Politicians Is Subject to Lobbyist Registration

Politicians holding elected or appointed positions are public office holders. Communication with them, even if it occurs at a fundraising event, is subject to federal, provincial and municipal lobbying law.

Candidates who have not yet been elected, employees of political parties, and partisan volunteers who hold no public office are not considered public office holders under Canadian lobbying law[1].

Provincial lobbying laws[2] define lobbying as communication with a public office holder in an attempt to influence governmental or legislative decision-making[3]. In Quebec, whose statute applies to lobbying of both provincial and municipal officials within the province, lobbying also includes a communication that may reasonably be considered by its initiator as capable of influencing a governmental or legislative decision.

Canadian federal lobbying law, meanwhile, applies to communications with public office holders about governmental and legislative decisions. It does not matter whether a communication is made in an attempt to influence. The lobbying laws in the Cities of Hamilton, Ottawa and Toronto are similar.

Frequently, the conversation at political fundraising events concerns governmental or legislative decision-making. Consequently, the risk that some of the conversation constitutes lobbying is high[4]. In most Canadian jurisdictions, the failure to register lobbying is an offence.

In the case of lobbying on behalf of a company or organization by its own employees (typically known as "in-house lobbying")[5], registration often is not required unless the communication with public office holders consumes a prescribed amount of time[6].

There are, however, circumstances in which lobbying requires registration without regard to how much time is involved. A lobbying communication of any length, including a brief conversation at a political fundraising event, requires registration in each of the following circumstances[7]:

  • Where the communication is by an independent contractor, consultant or other service provider (e.g., external accountant or lawyer) on behalf of a client.
  • Where a member of the board of directors communicates with a federal public office holder on behalf of the corporation[8].
  • Where communication with a provincial or municipal office holder within the Province of Quebec is made by a member of the board of directors, or by an executive, of a company or organization.
  • Where a member of the board of directors[9] communicates on behalf of the corporation with a provincial public office holder in New Brunswick[10], Newfoundland and Labrador, or Nova Scotia, or with a municipal public office holder in the City of St. John's[11].
  • In the case of any communication with a municipal public office holder in the Cities of Brampton, Hamilton, Ottawa and Toronto.

It is prudent to obtain advice from a lobbying-law expert before speaking to a public office holder at a political fundraising event or, if the conversation has already occurred, as soon as possible thereafter.

Service Providers Are Lobbying When they Introduce Clients to Government Officials

Everywhere in Canada[12], a consultant or professional service provider[13] must register as a lobbyist if he or she arranges a meeting between a government official and a paying client.

Any of the following activities could constitute arranging a meeting and, therefore, require registration as a consultant lobbyist:

  • Selling an event ticket to a client for the purpose of connecting the client with a politician.
  • Asking a politician to speak to one's client.
  • Making an introduction between politician and client.

In most jurisdictions, a consultant lobbyist must file a registration within ten days[14]. Failure to register when required is an offence.

Ethical Rules Restrict Lobbyists' Involvement in Political Fundraising

While participation in the political process, including the making of political contributions, is the democratic right of every Canadian, involvement in political fundraising must respect lobbyists' codes of conduct and must not place public office holders in a conflict of interest.

In the City of Toronto, a lobbyist is otherwise free to make campaign contributions, but must not contribute to a councillor seeing re-election where the contribution is a form of lobbying about an issue to be decided by Council. Similarly, tickets to fundraising receptions may not be purchased as a form of lobbying[15].

A Toronto municipal lobbyist may help to raise funds for a candidate, but must not:

  • Lobby a councillor for whom he or she is fundraising;
  • Raise funds for a councillor whom he or she is lobbying; or
  • Fundraise for candidate with the intention of lobbying that candidate once elected[16].

A federal lobbyist must not raise funds for the benefit of a politician whom he or she is lobbying, or whose office or department is being lobbied[17]. The leading precedent on this point involved a lobbyist who chaired the fundraising committee for a politician who was junior minister of a department that the lobbyist happened to be lobbying. The Federal Court of Appeal held in his case that:

"A lobbyist's stock in trade is his or her ability to gain access to decision makers, so as to attempt to influence them directly by persuasion and facts. Where the lobbyist's effectiveness depends upon the decision-maker's personal sense of obligation to the lobbyist, or on some other private interest created or facilitated by the lobbyist, the line between legitimate lobbying and illegitimate lobbying has been crossed."[18]

Consequently, the federal Commissioner of Lobbying advises that the individual who organizes a fundraising event for an electoral district association or a campaign should not lobby the candidate (if successful) or his or her staff. On the other hand, the Commissioner states that a federal lobbyist may purchase a ticket to a fundraising event, or otherwise make a political contribution (within lawful limits), for the benefit of a politician being lobbied or who will be lobbied if successful[19].

Other Canadian jurisdictions prohibit lobbyists from placing public office holders in a conflict of interest. It is an offence under the Lobbyists Registration Act (Ontario) for a lobbyist knowingly to place a public office holder in a position of conflict of interest[20]. The Code of Conduct for Lobbyists (Quebec) provides that, "Lobbyists shall not induce a public office holder to contravene the standards of conduct applicable to him or her."[21] Similar prohibitions exist in New Brunswick[22], Newfoundland and Labrador[23], Nova Scotia[24], Brampton[25], Ottawa[26] and Toronto[27].

Contributors Cannot be Reimbursed

Every Canadian jurisdiction requires that a political contribution be made using the contributor's own money. The contributor cannot use funds provided by another person for that purpose. For example, a service provider cannot buy a ticket to a political fundraising event and then invoice the client for the purchase price.

Similarly, an individual cannot purchase a ticket to a political fundraising event, and then subsequently obtain reimbursement from his or her employer. If the employer is to be the contributor – and then only in a jurisdiction where the employer (e.g., a corporation) is permitted to make political contributions – it must pay for the ticket(s) directly.

Under federal law, and in Alberta, Manitoba, Nova Scotia and Quebec, corporations are prohibited from making political contributions.

Lobbying Disallowed at Federal Fundraising Events

Since 2009, federal Ministers and Parliamentary Secretaries have been subject to specific standards designed to ensure the separation of official government business from political fundraising[28].

According to these standards, a Minister, Parliamentary Secretary or staff member should not discuss departmental business at a fundraising event. Any person who wishes to discuss departmental business should be passed on to an appointment with the Minister's office or department. This rule effectively excludes any possibility of lobbying Ministers, Parliamentary Secretaries and ministerial staff members at fundraising events.

The standards also state that the following individuals should not be involved in fundraising for Ministers and Parliamentary Secretaries, or even serve on the boards of their riding associations[29]:

  • Lobbyists registered to lobby Ministers and Parliamentary Secretaries, their staff or their departments.
  • Employees of lobbying firms retained to lobby Ministers, Parliamentary Secretaries, their staff or their departments.
  • Employees of corporations and organizations whose employees are registered to lobby Ministers, Parliamentary Secretaries, their staff or their departments.
  • Individuals employed in, contracted by, or who otherwise represent corporations and organizations that have current or anticipated official dealings with Ministers, Parliamentary Secretaries, their staff or their departments.

It can be seen that the list of individuals who are precluded from involvement in fundraising, campaigns and riding association board membership extends far beyond those who are actually lobbying.

Right to Counsel

Potential breaches of lobbying law and/or lobbyists' codes of conduct are routinely investigated by federal, provincial and municipal regulators of lobbying.

Many individuals, businesses and organizations have attempted to handle lobbying compliance investigations personally or without the benefit of counsel experienced in lobbying law. The decision to handle the matter alone or without the assistance of a lobbying-law expert should not be taken lightly.

All individuals, corporations and organizations have the right to seek advice from and be represented by legal counsel in dealings with lobbying regulators. It is prudent to seek expert legal advice immediately upon being contacted by a lobbying regulator, and not to answer questions without benefit of legal counsel and representation.

One reason to exercise caution is that statements made, emails sent, and other communications to a regulator can be used against a lobbyist in an investigation or prosecution.

Next Steps

In addition to potential fines or monetary penalties, contraventions of lobbying law are matters of public record and can cause significant reputational harm.

Any company, organization or individual that wants to communicate with politicians at a political fundraising event, or contemplates playing an active role in raising funds for a party, candidate or campaign, should take concrete measures to ensure compliance with all applicable lobbying legislation.

Please contact Guy Giorno or any member of our lobbying-law compliance team for more information on the subject of this bulletin.

[1]       While Canadian lobbying law might not apply to dealings with political actors who do not hold public office, such dealings may nonetheless be subject to other laws including but not limited to the Criminal Code (Canada) and the Foreign Corrupt Practices Act (U.S.).

[2]       Lobbying laws exist in all provinces except Prince Edward Island. The laws in New Brunswick and Saskatchewan have been enacted but are not yet in effect.

[3]       Each statute enumerates the types of governmental and legislative decisions that are subject to lobbying. The enumerated lists vary slightly from jurisdiction to jurisdiction.

[4]       This assumes that the conversation involves communication with a public office holder.

[5]       Employees and officers who engage in such lobbying are known as "in-house lobbyists" everywhere except Alberta (where they are called "organization lobbyists" and Quebec (which uses the terms "enterprise lobbyist" and "organization lobbyist").

[6]       The amount of time (quantitative threshold for registering lobbying activity) varies by jurisdiction: for example, 100 hours per year across the company or organization (Alberta, British Columbia, Manitoba and Saskatchewan), or 12 hours per year (Quebec), or the equivalent of 20 per cent of one employee's duties (federal, Newfoundland and Labrador, Nova Scotia and, in some circumstances, Ontario). In some jurisdictions only the time spent communicating with public office holders is taken into account; in other jurisdictions, preparation time, including travel time, is considered as well.

[7]       This list assumes that the communication otherwise has the attributes of lobbying: namely, it is with a public officer holder and is made in an attempt to influence (or, federal/Hamilton/Ottawa/Toronto, is about) (or, Quebec, may reasonably be considered by the initiator as capable of influencing) a type of decision enumerated in the statute.

[8]       Unless the director serves without compensation.

[9]       Unless the director serves without compensation.

[10]     Only once the New Brunswick statute comes into force.

[11]     The Newfoundland and Labrador lobbying statute also applies to lobbying of St. John's municipal officials.

[12]     That is, everywhere in Canada that has a lobbying law. Lobbyist registration laws exist at the federal level, in nine provinces (though the laws in New Brunswick and Saskatchewan are not yet in effect), and in many municipalities.

[13]     In all jurisdictions, anyone – including an external lawyer, accountant, management consultant or independent contractor – who is not an employee or officer of the client is treated as a consultant lobbyist and is subject to the consultant-lobbying rules.

[14]     The deadline is ten days under federal law and in every province except Quebec (30 days), New Brunswick (15 days but its law is not yet in effect) and Prince Edward Island (no lobbying law). Under federal law and in Alberta, British Columbia, Manitoba and Saskatchewan (law not yet in effect), registration must occur within ten days after agreeing to lobby (e.g., arranging the meeting) for the client. In other provinces the deadline is calculated based on when the consultant first communicates with a public office holder.

[15]     City of Toronto, Integrity Commissioner and Lobbyist Registrar. "Lobbying and Municipal Elections at the City of Toronto," Joint Interpretation Bulletin (Jan. 10, 2014).

[16]     Ibid.

[17]     Canada, Commissioner of Lobbying, Reports on Investigations (February 2011).

[18]     Democracy Watch v. Campbell, 2009 FCA 79, [2010] 2 F.C.R. 139, at para. 53.

[19]     Canada, Commissioner of Lobbying, "Commissioner's Guidance for lobbyists regarding the application of Rule 9 of the Lobbyists' Code of Conduct – Political Activities" (December 2015).

[20]     Defined as an activity prohibited by section 2, 3 or 4 or subsection 6 (1) of the Members' Integrity Act, 1994, or that would be so prohibited if the public office holder were a member of the Legislative Assembly. S. O. 1998, c. 27, Sched., subss. 18 (5), (6), (7).

[21]     R.R.Q., c. T-11.011, r. 2, s. 9.

[22]     S.N.B. 2014, c. 11, subss. 37(3) and (4). [passed but not yet proclaimed in effect]

[23]     S.N.L. 2004, c. L-24.1, subss. 31(3) and (4).

[24]     S.N.S. 2001, c. 34, subss. 18(3) and (4).

[25]     City of Brampton, By-Law No. 149-2015, Schedule "A," subs. 5(b).

[26]     City of Ottawa, By-Law No. 2012-309, Appendix A, subs. 6(2).

[27]     Toronto Municipal Code, Chapter 140 (Lobbying), §140-45.

[28]     These standards now appear in Open and Accountable Government (November 27, 2015), Annex B, "Fundraising and Dealing with Lobbyists: Best Practices for Ministers and Parliamentary Secretaries."

[29]     Specifically, Ministers and Parliamentary Secretaries should not seek to have these individuals included on fundraising or campaign teams or on the boards of electoral district associations.

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