As part of a new bill intended to combat foreign interference in Canadian affairs, the Canadian government has proposed that any person advocating for certain types of foreign actors with respect to activities intended to influence political and governmental processes in Canada must publicly register and report their activities. This would include registration by those acting on behalf of a range of state-owned and controlled businesses — including those owned or controlled by Canada’s major trading partners.

In addition to amending a number of existing laws respecting national security and intelligence, the Countering Foreign Interference Act, introduced as Bill C-70, would enact the Foreign Influence Transparency and Accountability Act (FITAA), a new law that would create a Foreign Influence Transparency Registry, to be overseen by an independent Foreign Influence Transparency Commissioner. The law is intended to ensure transparency with respect to efforts to influence government and political processes and decision-making in Canada, particularly by foreign actors, in order to raise public awareness of such efforts and to strengthen national security.

The law includes both civil and criminal penalties, depending on the severity of the breach. Where the line will be drawn is not yet clear. Under the offence provisions, non-compliance could result in criminal fines of up to $5 million or 5 years imprisonment, or both. The Commissioner will also be empowered to impose Administrative Monetary Penalties for non-compliance, although the details of this authority, including the quantum of such penalties and the factors to be considered in imposing them, remain to be specified by regulation.

Who must register, and for what activities

The core requirement of FITAA, which relies on a rather complicated set of inter-related definitions, would require that a person who enters into an “arrangement” with a “foreign principal” must register with the Commissioner within 14 days of entering in the arrangement, then provide updates thereafter. Unfortunately, the details of the information required to be provided to the Commissioner are unknown at this time, as these particulars are to be specified by regulations to be promulgated after passage of the Bill. As such, the potential burden of this registration requirement cannot yet be quantified.

Registration would not be required by persons who are employees of a foreign principal and acting openly in that capacity, nor would it be required for diplomatic agents, consular officials or official representatives in Canada of a foreign government. Registration would, however, be required for others advocating for foreign interests respecting Canadian political and legislative processes, including, for example, lawyers, accountants, consultants and government relations professionals.

The registration obligation otherwise applies with respect to an arrangement under which a person undertakes to carry out, under the direction of or in association with a foreign principal, any of the following activities in relation to a political or governmental process in Canada:

• Communicating with a public office holder
• Communicating or disseminating by any means (including social media) information that is related to the political or governmental process
• Distributing money or items of value or providing a service or the use of a facility

For the purpose of FITAA, the political or governmental processes to which such arrangements may relate include:

• legislative proceedings
• development or amendment of bills, policies or programs
• decision-making by public officer holders or government bodies (including the awarding of a government contract)
• the holding of an election or referendum
• the nomination of a candidate or the development of political party’s platform

Such processes can relate to Canadian federal, provincial or territorial governments; as well as indigenous councils, governments and certain other entities authorized to act on behalf of indigenous peoples.

In addition to requiring registration with respect to influencing activities undertaken on behalf of foreign powers and associations of foreign powers, FITAA would also require registration with respect to such undertakings on behalf of business entities that are controlled, in law or in fact, or substantially controlled by a foreign state. This would include, for example, many foreign-based public sector pension funds, including those owned by close allies of Canada or their constituent states or provinces.

Exceptions – or lack thereof

FITAA includes only limited exceptions as to its application. As noted above, it does not apply to diplomats and openly-acting employees of a foreign principal. It also does not apply with respect to arrangements to which the federal government is a party, or to any person or arrangement that falls within a class specified by regulation. As noted, a draft of those regulations has not yet been released.

However, unlike the federal Lobbying Act, which covers some similar ground, FITAA does not contain exemptions with respect to communications with public office holders with respect to the enforcement, interpretation or application of a law; in respect of oral or written submissions to legislative committees in proceedings that are a matter of public record; or with respect to a simple request for information.

Those exceptions mean, for example, that legal counsel do not have to register as lobbyists when consulting with the Competition Bureau or the Foreign Investment Review and Economic Security Branch of Innovation, Science and Economic Development Canada about questions of interpretation of the Competition Act or Investment Canada Act. By contrast, FITAA would appear to require counsel to register with the new foreign influence transparency registry with respect to such activities where counsel would be acting for a specified foreign entity such as a state-owned enterprise or sovereign wealth fund.

More registerable activities than lobbyist registration regime

For those acting on behalf of foreign state-owned or controlled entities, FITAA would overlap in part with current obligations under the Lobbying Act, such that those communicating with federal public office holders with respect to matters such as legislative proposals, government policy or programs, or the awarding of government grants or contracts would have to register with both the Commissioner of Lobbying and the new Foreign Influence Transparency Commissioner.

However, FITAA would go much further than the Lobbying Act, as the new law would not just apply to communications with public office holders, but would also cover a broader range of influencing activities like funding and public information campaigns, as well as to a more expansive list of purposes for undertaking such activities. In addition, it would apply to activities intended to influence all levels of governments in Canada, not just federal ones.

As a practical example, legal counsel do not currently have to register as lobbyists when making filings under the Competition Act or Investment Canada Act, or communicating with public office holders related those filings , since the Lobbying Act does not require registration for communications respecting government decision-making (beyond the awarding of contracts or grants). However, as currently drafted, FTIAA would trigger a reporting obligation for counsel making such filings on behalf of a designated foreign entity, since FITAA requires registration for communications with public office holders respecting decision-making by public officer holders or government bodies.

Next Steps

The bill received first reading in the House of Commons on May 6, 2024. As such, it is still subject to considerable debate in the House and Senate and study by the relevant parliamentary committees. Given the spotlight on foreign interference and the ongoing work of the Public Inquiry into Foreign Interference in Federal Electoral Processes and Democratic Institutions, there is expected to be multi-party support for the concept of a foreign interference registry, but as always the devil will be in the details. We will continue to monitor the bill as it makes its way through the legislative process and provide updates as they arise.

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