A fight seems to be shaping up over the B.C. government's new cap on third-party election advertising.

Bill 42, introduced on Wednesday by Attorney General Wally Oppal, includes sweeping changes to the Election Act. It would limit spending by groups other than political parties to $3,000 per riding, or $150,000 overall.

It would apply not only during the 28-day election campaign, but also in the four-month period preceding it.

"You know, third-party participation in elections is a good idea in any democracy," Oppal told reporters.

"But at the same time, we think it's necessary to have some kind of limits. Otherwise, you'll have the American style of campaigning, where you have unlimited spending by third parties."

Jim Sinclair, president of the B.C. Federation of Labour, said the bill is clearly an attempt to muzzle the government's critics, and they're considering a legal challenge.

"We're talking about it. We certainly cannot agree to be gagged by this kind of decision," Sinclair told CBC News on Thursday.

"I think it's the height of hypocrisy that they open up their doors for millions and millions of dollars from corporations to fund their party with no limitations all," he said. "But when people want to talk about health care and education going into an election, they're not allowed to do that now."

Labour spent $3.8M before 2005 vote

Labour spent about $3.8 million on advertising before the 2005 election, much of it attacking the Campbell government's record in areas such as health care and education, Sinclair said.

The $150,000 cap would only be enough to buy three or four newspaper ads and a few minutes of television time, he said.

Liberal house leader Mike de Jong denied the bill is aimed at silencing labour.

"I'm not sure I follow how establishing a clear set of rules that is applicable to everyone is somehow designed benefit one group or another," de Jong said.

Opposition New Democratic Party attorney general's critic Leonard Krog said his party supports spending limits for advocacy groups, but he thought it was ironic the Liberals are now endorsing a measure they opposed when they were in opposition.

In 1995, the NDP government legislated a $5,000 cap on third-party election spending. At the time, the Liberals described it as a gag law. A Vancouver tax accountant successfully challenged the law in court.