Changes to third-party group behaviour shows power of new advertising rules

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This article was published 25/09/2019 (1821 days ago), so information in it may no longer be current.

OTTAWA – Two third-party groups shifted their advertising strategies as the election campaign began, showing the impact of Canada’s new ad rules.

Canadians for Clean Prosperity had advertised during the pre-election period (between June 30 and the campaign’s start on Sept. 11) in support of the federal carbon tax. Through a group called Fair Path Forward, it spent almost $170,000 on Facebook ads, but ended its activities just before the campaign started.

A second group, Canada Strong and Proud, promoted ads in favour of Canada’s energy sector, switching to ads directly targeting Liberal Leader Justin Trudeau once the campaign started. Through a page called “Proud To Be Canadian,” the group has spent over $100,000 on Facebook ads since June and up to $8,500 since the start of the campaign.

The information is publicly available from Facebook, in its new library of Canadian political ads.

But despite the large amounts of money, neither group has so far been required to disclose its contributions or expenses through filings with Elections Canada, because of how Canada’s new third-party advertiser rules treat “issue advertising.”

Advertising during the pre-writ period that addresses policy issues and does not specifically advocate for or against political parties or candidates is not regulated. That means a third-party group that only paid for issues advertising during the pre-writ period does not need to disclose its contributions or expenses to Elections Canada, which posts such filings online.

But if it’s done after Sept. 11, issues advertising is considered “election advertising” and is treated the same way as ads that advocate explicitly for or against a party or candidate. Spending on that advertising must be disclosed, along with where the groups buying the ads get their funding.

Canada has already seen one instance of a third-party group adapting its behaviour to deal with Canada’s new laws. Back in the spring, before the official pre-election period when the first real rules kick in, two groups — Shaping Canada’s Future and Engage Canada — spent tens of thousands of dollars on social media and TV ads. Neither group was required to register as a third-party advertiser or disclose its donors.

Canada Strong and Proud did not immediately respond to requests for comment on why it shifted its spending habits when the election was called.

But the executive director of Canadians for Clean Prosperity — which is not registered as a third-party advertiser— emphasized that his group made the decision to stop advertising before the campaign for several reasons, of which the advertising rules were just one.

Michael Bernstein said advertising in the pre-election period fit Clean Prosperity’s goals of staying non-partisan and away from arguments made during the official election campaign. Bernstein added there was less political advertising in general over the summer, and his organization hoped to use that vacuum to break through to more people.

During that time, Bernstein said his group consulted with Elections Canada and their own lawyer to make sure their ads, which referred to “some politicians” who are against the carbon tax, remained within the realm of issue advertising and did not attack or promote any specific parties or candidates.

But the new advertising rules did influence Canadians for Clean Prosperity’s thinking in two ways, he said.

The first was lingering worry that registering a charity with Elections Canada as a third-party advertiser might imperil its status in the eyes of the Canada Revenue Agency.

“I think there would be scope for charities to register and be safe, but even that one per cent uncertainty … it doesn’t make sense to take that risk,” he said.

In August, environmental charities criticized Elections Canada for a lack of clarity on whether they risked losing their charitable status by registering as third-party groups. The CRA said at the time simply registering as a third-party would not threaten their status.

But Bernstein said the confusion over whether talking about climate change would be considered partisan created a chilling effect.

The second part of Bernstein’s concern over the new third-party rules was around transparency.

“We think it’s important our members can donate in a way that doesn’t expose them to the unfortunate kinds of vocal attacks that people sometimes get engaged in online these days,” Bernstein said.

“More generally, we make a commitment to our donors to maintain their anonymity.”

Bernstein said he recognizes the objectives of the rules in avoiding a free-for-all system like the United States, where third-party spending is far less restricted.

“There’s probably some way to enable a little more discussion while still accomplishing the important — and I think rightful — objective of limiting the influence of any individual person or corporation, or certainly any foreign influence,” he said.

Third-party groups that have spent or received more than $10,000 for regulated activities must disclose that money in an interim return due Sept. 30.

This report by The Canadian Press was first published Sept. 26, 2019.