Foreign Interference Laws in Canada | Insights

Foreign interference in Canada

Over the past few years, foreign interference has become more important in Canada. For example, the 2021 Public Report released by the Canadian Security Intelligence Service (CSIS) identified foreign interference as one of Canada’s key national security threats.

Canadian legislative efforts to combat foreign interference

After several years of consultations focused on the threat of foreign interference in Canada, in May 2024 the federal government introduced comprehensive legislation focused on protecting democratic processes in Canada. Bill C-70, Act on Counteracting Foreign Interference, proposes updating existing laws and creating new laws to better equip the federal government to protect Canadians from the threat of foreign interference. The bill proposes:

• Change Security Information Act creating new crimes for certain acts related to foreign interference, e.g. influencing election results. These amendments also propose addressing the issue of sharing military technology and knowledge and defining those who will be permanently bound to secrecy.
• Modernize Canadian Intelligence Service Act to enable CSIS to share information with municipal, provincial and Indigenous governments, as well as Indigenous communities. It also expands CSIS’s authority to seek access orders for data containing personal information.
• Establishing a standard framework within Canadian Evidence Act for the processing of sensitive information in federal proceedings pending in Ottawa-Gatineau.
• Expand the concept of “sabotage” under: the Penal Code Down:
  • create a new offense of sabotage focusing on conduct targeting “essential infrastructure,” defined as a public or private facility or system that provides or distributes services essential to the health, safety, security and economic well-being of Canadians;
  • create a new offense of sabotage by making, possessing, selling or distributing a device intended to be used, or with the knowledge that it will be used, to threaten the safety, security or defense of Canada, to cause a serious threat to public health or safety or to threaten the security of foreign military forces present in Canada; AND
  • clarify that the offense of “sabotage” is intended to include criminal acts where a person intended to endanger the safety, security or defense of Canada, rather than acts whose purpose was harmful to the safety, security or defense of Canada. Reasonable support or protest where there is no intent to cause harm is not covered by these new offenses.
• Introduce new ones Transparency and accountability regarding foreign influence Work which proposes the creation of a Foreign Influence Registry, overseen by an Independent Foreign Influence Transparency Commissioner, which would require individuals or entities entering into arrangements with a foreign principal or taking actions intended to influence the Government of Canada or the Canadian political process to register publicly. This Act broadly defines a “foreign principal” to include foreign entities (including business entities), foreign powers or foreign states, which will cover a wide range of enterprises such as financial institutions, energy companies and sovereign wealth funds, among others. As a result, the compliance burden on such entities can be significant.

Several of them proposed legislative changes, especially new ones Foreign Influence Transparency and Accountability Actwill impact foreign companies operating in Canada, as well as any Canadian companies and organizations working with foreign contractors or operating in the “essential infrastructure” sector.

In addition to the new measures in Bill C-70, other existing Canadian legislative or regulatory frameworks aimed at combating political interference include:

• The Lobbying Act promotes transparency by requiring individuals who lobby for federal public offices to register with the Office of the Commissioner of Lobbying and disclose certain information, including the identity of their client. In theory, foreign organizations, including foreign governments, are also subject to transparency requirements, but in reality few foreign governments are legally required to register due to broad exemptions.
• The Canadian Elections Act prohibits foreign involvement in electoral activities.
• The Act on conflicts of interest prevents conflicts between private interests and the duties of appointed public officials.

However, recognizing that the current legal framework is insufficient to address the growing threat of foreign interference in Canada, the federal government has launched a number of policy initiatives to further combat foreign interference.

In 2023 Banking Act and other similar legal frameworks governing federal financial institutions have been amended to require such institutions to establish and maintain policies and procedures to protect against threats to integrity or security, including foreign interference. At the same time, the mandate of the Office of the Superintendent of Financial Institutions was expanded to ensure federal financial institutions’ compliance with this new requirement. These changes also gave the Secretary of Finance the power to order the Inspector of Financial Institutions to assume control of a federally regulated financial institution for any national security reason.

Although the preliminary report of the public inquiry into foreign interference in federal electoral processes and democratic institutions released on May 3 found that the acts of foreign interference that occurred in the last two federal general elections did not undermine the integrity of our electoral system, the commissioner noted that such actions have indeed left a “stain on our electoral process.” The Commission is continuing its review and is likely to make additional policy recommendations to further prevent political interference in the electoral process.

In the next editions of this series, we will take a closer look at the results of the above-mentioned consultations and the proposed legislative changes.

What’s next

Countering foreign interference is complex. This will require, among other things, greater education for Canadian public and political actors and greater resources for law enforcement and intelligence agencies. It also requires a coordinated response from the private and public sectors in Canada and internationally.

We are likely to see increased due diligence obligations for organizations, expanded powers for regulators to combat issues related to national security and foreign interference, and increased registration and reporting requirements for foreign entities.

Learn more about recent legislative and regulatory efforts to combat foreign interference in Canada’s financial sector.