Many charities and not-for-profits affected by Ontario's new lobbying act

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So, your board has a concern with a government program and has some suggestions for changes. The board instructs you, as the executive director, to let the appropriate ministry know and to try to get a change in the program. The board feels that the change would make the program operate more efficiently and be more effective. You have done this type of thing before, so no problem, right?

Wrong. The rules have changed for charitable and not-for-profit organizations. The Lobbyist Registration Act, 1998 came into force in early 1999. The Act was passed with little fanfare in 1998 and with little consultation. Nevertheless, it is the law in Ontario. It applies to both businesses who lobby and to charitable and not-for-profit organizations. The Act appears to operate from the perspective that a 'lobbyist' is a 'lobbyist' regardless of the cause.

Three types of lobbyists

The Act requires all persons who intend to communicate with and influence a public office holder (which is broadly defined and includes most provincial public servants, provincial politicians and their staff) in the Government of Ontario to file a return with the Registrar. It sets out three types of lobbyists:

  • consultant lobbyist,
  • in-house lobbyist for persons and partnerships, and
  • in-house lobbyist for organizations.

Consultant lobbyists undertake to lobby on behalf of a client for payment. In-house lobbyists are employees, a significant part of whose duties involve lobbying. The definition of 'lobbying' is very broad. It includes activities intended to influence a public office holder with respect to changes to legislation, regulations, programs, privatization, and awarding of grants, contributions or financial benefits. Many charitable and not-for-profit organizations will be affected by the Lobbyist Registration Act.

Lobbyists (or the most senior officer in the case of organizations) must file a return with the Registrar within the time periods set out in the Act. Failure to do so is an offence under the Act, with the maximum fine on conviction for an offence being $25,000. Although this level of fine would not be the norm, it is probably better to avoid the issue than argue it in court.

Detailed filing requirements, but volunteers excluded

The filing requirements include information about the organization, the 'in-house lobbyist', source of funding, subject matter of the lobbying and techniques of lobbying, including 'grass-roots communications'.

There are some exceptions in the Act. For example, volunteers do not appear to be covered by the legislation. It may be prudent to have the members of the board, who are volunteers, carry out the 'lobbying' activities. In addition, the legislation explicitly excludes oral or written submissions in proceedings that are a matter of public record to a committee of the Legislative Assembly.

The regulations define what is meant by 'significant part of duties' for in-house lobbyists. The threshold is reached when the accumulation of lobbying activities over a three-month period reaches 20 per cent of the employee's time. If more than one employee carries out lobbying activities, the time spent by all employees who lobby is added together and registration is required where it amounts to 20 per cent of the time for a full-time employee.

Volunteer-run organizations exempt?

There are some technical problems with the wording of the legislation. For example, the senior officer of an organization must file the return. 'Senior officer' is defined as the most senior officer of an organization who is compensated for the performance of his or her duties. However, many smaller, community organizations do not have paid staff. If there is no paid staff, is there a legal obligation to file a return?

Organizations, especially registered charities, must also be conscious of the legal limitations with respect to lobbying. 'Lobbying' by its nature is intended to influence what are often political decisions. If the lobbying activities are incidental and ancillary to the charitable objects of the organization, there may not be a problem at common law or under the Income Tax Act. However, a registered charity needs to be careful not only in how and for what it 'lobbies' but also in the completion of the return so as not to expose itself to problems with respect to its registration as a charity.

Don't ignore this complex new legislation

The legislation is complex and very new. It will, no doubt, take some time before charitable and not-for-profit organizations understand the Act and their legal obligations under it. Boards and staff should read the Lobbyist Registration Act, 1998 and obtain legal advice on how best to comply with it and to protect the interests of their organizations.

Further information about the Act is available from the Office of the Integrity Commissioner, Suite 1301, 101 Bloor Street West, Toronto, Ontario, M5S 2Z7 (416 327-4053). The Act, Regulations, and A Guide to the Lobbyist Registration Act are also on the Lobbyists Registration Office website at http://lobbyist.oico.on.ca.

Don Bourgeois is an Ontario lawyer who has practiced in the charitable and nonprofit area of law and is an officer and director of several organizations. He is the author of The Law of Charitable and Non-Profit Organizations and The Law of Charitable and Casino Gaming, both published by Butterworths Canada. He can be reached by e-mail at don_bourgeois@hotmail.com.

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