Bill C-70's New Foreign Influence Registry to Impose Heavy Compliance Burden

In response to high-profile concerns about foreign interference in Canadian elections, Canada’s Minister of Public Safety has proposed a new Bill C-70, the Countering Foreign Interference Act (Bill). The Bill makes a number of sweeping changes to Canada’s foreign interference and security regimes. Its broad definitions also raise several compliance challenges, which we highlight below.

This bulletin focuses on the Bill’s new proposed Foreign Influence Transparency and Accountability Act (Act), the new foreign influence registry (Registry) created under that Act, and certain related provisions in the Bill. 

The Bill also makes several changes to the underlying evidentiary requirements, warrant provisions and criminal prohibitions relating to Canada’s security clearance and foreign interference regime. We have separately summarized these changes in our companion Blakes Bulletin: Canada Responds to Foreign Interference with New Criminal Offences and Procedures.

The New Registry

The Bill creates a new Foreign Influence Transparency Commissioner (Commissioner). The Commissioner is appointed by Cabinet (similar to the federal Lobbying Commissioner) and is not an officer of Parliament. 

The Commissioner’s role is to administer the new Act and oversee the creation and operation of the Registry. 

The new Act provides that any person who enters into an “arrangement” with a “foreign principal” must, within 14 days after the day on which they enter into the arrangement, provide the Commissioner with the information specified in the regulations.

Both an “arrangement” and a “foreign principal” are very broadly defined.

Who is a Foreign Principal?

A “foreign principal” means a foreign economic entity, a foreign entity, a foreign power or a foreign state, as defined in the Security of Information Act (SOIA).

This definition would accordingly include a foreign state (or its government, or the government of a political subdivision), a group of foreign states (even, for example, a treaty organization of which Canada is a member, such as NATO), or an entity that is controlled (in law or in fact) or owned by a foreign state or group of foreign states. It can also include foreign political parties or factions, terrorist groups, any entity exercising or purporting to exercise the functions of a government (whether or not recognized), and any person acting at the direction of, for the benefit of, or in association with the foregoing. 

This broad definition could encompass a wide range of legitimate commercial actors (beyond the obvious dealings with embassies or foreign states directly). Foreign state-owned media, financial institutions, energy companies, government agencies, sovereign wealth funds, investment vehicles, infrastructure authorities, pension funds and more could all fall into this definition. Notably, all such organizations’ agents could fall under this, too. 

In many cases, it may be difficult or impossible for a Canadian person to know that the entity they are dealing with meets the definition of “foreign principal.”

What Is an Arrangement?

An “arrangement” is equally broad and encompasses any situation under which a person undertakes to carry out, under the direction of or in association with a foreign principal, communications with a public office holder; communicating or disseminating or causing to be communicated or disseminated by any means, including social media, information that is related to a political or governmental process; or distributing money or items of value or providing a service or the use of a facility.

A “political or governmental process” is a non-exhaustive definition that includes any proceeding of a legislative body or development of a legislative proposal; the development or amendment of any policy or program; the making of a decision by any public office holder or government body (including procurement); the holding of any election or referendum; or the nomination of a candidate or development of a political platform by a political party.

This could encompass a range of political activities. We note the following, by way of non-exhaustive examples only:

• Financial services: Financial institutions, market intermediaries, brokers and money services businesses will have to carefully consider any work (as a broker, financial advisor, processor or simply as a banker) done for foreign principals. If the organization is facilitating the transfer of money for a political or governmental process (which may be practically impossible to assess on a case-by-case basis), registration could be required.   
• Government relations: A public affairs firm would have to register when acting for any foreign principal. This would be in addition to any lobbying registration, include any procurement-related work and even constituency matters, and include federal, provincial or municipal work. There is no exemption for mandates already registered as lobbying, and none of the thresholds or exemptions that currently apply to lobbying mandates.
• Public relations: A communications, crisis management, marketing or public relations firm would have to register any mandate for a foreign principal that touches on government or politics — even if that is an advisory-only mandate. This includes something as common as securing ads on social media.
• Professional services: Accountants, lawyers and other professional advisors would have to register any and all mandates relating to government decisions or political matters for foreign principals, regardless of privilege and confidentiality obligations. Notably, in its current form, the Bill does nothing to account for the privilege that protects solicitor-client relationships.
• Media services: Media and digital platforms (including social media companies, conventional media and news organizations, possibly even search engines) would have to consider whether to register engagements from foreign principals, including advertisements sold to those foreign principals.

What Must be Reported?

The details of what exactly is to be reported to the Commissioner and disclosed in the Registry are left to the regulations, which have not yet been drafted. However, we expect the Registry, at a minimum, to include the name of the registrant, the identity of their foreign principal, the political or governmental process they are looking to influence and the methods of influence. Regular updates will also be required. 

What Are the Implications of Not Reporting?

The Act contemplates administrative penalties, fines up to C$5 million and up to five years in prison. The Commissioner will have broad investigatory powers (including compelling witnesses and evidence, and charging those who obstruct an investigation or make misrepresentations). The Act has a due diligence defence, which will be critical for commercial enterprises. 

What’s Next?

The Act leaves open the possibility that certain classes of persons otherwise falling into the “foreign principal” category and certain categories of arrangements may be exempted. However, the government has indicated that professional services, including lawyers, will not be exempt from registration. The government has also advised that they expect the new Commissioner, once appointed, to develop extensive guidance on the Act. 

However, given the very broad definitions and extremely serious penalties attached to the Act, careful and fulsome consideration of the Bill (at committee) and the proposed regulations (when available) will be important. Organizations or industry associations who believe they may be adversely affected should contact us for a discussion of their options. 

For further information, please contact:

or any other member of our Public Sector Crisis & Compliance or Financial Services Regulatory groups.