Ontario Government deals a major blow to third party advertisers
This week saw a lot of back and forth on amendments to Ontario’s Election Finances Act (the “Act”) and IAB Canada’s policy team has been paying close attention to the potential impact on the ability for publishers and platforms to offer “political advertising” (i.e. both election and issue advertising) to third parties (i.e. those who aren’t political parties or candidates) in the province of Ontario.
In late April, the Act was amended and introduced a new obligation for ad sellers, requiring them to ensure that publishers and platforms do not sell advertising to “third parties”, (defined as someone “other than a registered candidate, registered constituency association or registered party) if they “should reasonably be aware” that doing so will cause them to exceed their spending limit. This would have a significant impact on the digital advertising sector as it would require manually checking every third-party advertiser against the Elections Ontario registry of published spend reports before accepting a campaign buy for any third-party engaging in “political advertising”.
“Political Advertising” as defined by federal legislation, is considered any advertising “with the purpose of promoting or opposing any registered party or its leader or the election of a registered candidate and includes advertising that takes a position on an issue that can reasonably be regarded as closely associated with a registered party or its leader or a registered candidate”.
Most recently, at the direct request of the Premier’s office, and without any notice or consultation with affected stakeholders, the Act was amended to extend the period of regulation of third-party advertising. This new obligation imposed a new spending limit of $637,200 on each group over a year-long period leading up to the election. A $600,000 spending limit was in effect for just six months before the 2018 campaign. For added context, third parties accounted for upwards of $5 million in campaign related activities leading up to the 2018 election, and with the new obligation set to come into force on May 4th (leading up to a June 2022 Ontario election) their capacity to engage in political advertising would be deliberately limited.
These changes have taken everyone by surprise as they were introduced at the last-minute during Committee review, and also passed by both the Committee and the Ontario Legislature in less than a week. Subsequently, a court challenge was successfully initiated by the impacted third parties, who believed that the amendments were an attack on freedom of expression stating, “This is not just about the right of third parties to speak out on issues that are important to them — it is about the rights of all the people of Ontario to hear those messages and participate in our democratic system.” On June 8th, Justice Ed Morgan ruled that several sections of the Election Finances Act tabled by the province this year infringed on rights set out in the Canadian Charter of Rights and Freedoms and are “of no force or effect.” Importantly, Morgan declined to suspend his judgment, noting that Ontario is already less than one year from the next election.
In response to the June 8th ruling, Doug Ford has summoned MPPs back to legislature this afternoon with the intention to reintroduce their election law when the house reconvened later today with a “court-proof” invocation of Section 33 of the Charter, the so-called notwithstanding clause. Conversations that began today will continue into the weekend potentially ending with a vote on Monday evening.
If the legislation is passed, it would mark the first time in Ontario’s history that Section 33 has been used.
The bottom line is that elections advertising may be significantly impacted after all this back and forth should the Tories successfully overturn the ruling. Many of our members will find themselves in a similar situation to the 2019 Federal Election and will simply not accept political advertising at all.
In a year that is likely to include both provincial and federal elections, we will be keeping a close eye on things and will be holding an IAB Canada Election working group meeting to discuss this and other areas of concern for advertisers and publishers. If you are interested in joining the IAB Canada Elections working group, please reach out to firstname.lastname@example.org