Political Law: Staying Compliant Amid Complexity

Businesses that deal with Canada’s public sector face growing compliance obligations as rules related to supplier integrity, foreign influence and election finance evolve. These changes reflect policymakers’ efforts to enhance transparency and accountability from the private sector in an often politicized environment.

Here are five recent trends and developments shaping the complex intersection of business and government in Canada:

1. Lobbyists’ Reports. Lobbyists submitted 10% more communication reports on interactions with public officeholders in 2023-2024 compared to previous federal fiscal years. This trend indicates that many organizations are, advisably, erring on the side of caution by overreporting. Failing to report a registrable communication may result in an RCMP investigation, which can cause reputational damage even if no charge results.
2. Integrity Regime. Updates to the Ineligibility and Suspension Policy in May 2024 expanded the circumstances under which vendors can be debarred or suspended from supplying the federal government. Applicable violations now include those related to sanctions, terrorism financing, human trafficking and provincial lobbying laws, along with more general categories of circumstances that can result in debarment. Notably, ineligible suppliers can request an administrative agreement that would allow them to supply government entities after 36 months of any ineligibility, as opposed to five years under the previous regime.
3. Foreign Interference Legislation. When in force, the Foreign Influence Transparency and Accountability Act will establish a registry for “arrangements” with “foreign principals.” Any person or entity who enters into a covered arrangement must, within 14 days of the day on which they enter into the arrangement, report certain information in respect of the arrangement (to be specified in pending regulations). The legislation has broad definitions and harsh penalties of up to C$5-million fines and five years of imprisonment.
4. Election Finance Rules. Bill C-65 proposes significant changes to third-party election finance rules, including a higher threshold for registering regulated expenses (C$1,500 instead of C$500). The amendments also prohibit contributions to third parties via cryptocurrency, money orders and prepaid cards. (Bill C-65 had not received royal assent when Parliament was prorogued on January 6, 2025; therefore, it will need to be reintroduced or reinstated when prorogation ends on March 24, 2025.)
5. Parliamentary Committees. The increasing politicization of parliamentary committees in Canada poses challenges for businesses. Committees can ignore many legal privileges and protections in exercising their broad powers to compel documents and testimony. Witnesses should involve counsel and communication advisors in strategic preparation.

Have more than five minutes? Watch our recent webinar on this topic or contact any member of our Political Law group to learn more.