An Act to amend the Canada Elections Act (accountability with respect to loans)

This bill was last introduced in the 39th Parliament, 2nd Session, which ended in September 2008.

Sponsor

Peter Van Loan  Conservative

Status

Not active, as of June 17, 2008
(This bill did not become law.)

Summary

This is from the published bill. The Library of Parliament often publishes better independent summaries.

This enactment amends the Canada Elections Act to enact rules concerning loans, guarantees and suretyships with respect to registered parties, registered associations, candidates, leadership contestants and nomination contestants.

Elsewhere

All sorts of information on this bill is available at LEGISinfo, provided by the Library of Parliament. You can also read the full text of the bill.

Votes

  • June 17, 2008 Passed That the Bill be now read a third time and do pass.
  • June 10, 2008 Passed That Bill C-29, An Act to amend the Canada Elections Act (accountability with respect to loans), as amended, be concurred in at report stage with further amendments.
  • June 10, 2008 Passed That Bill C-29, in Clause 5, be amended by replacing lines 32 to 35 on page 5 with the following: “Officer shall inform the lender of his or her decision; furthermore, the candidate's registered association or, if there is no registered association, the registered party becomes liable for the unpaid amount as if the association or party had guaranteed the loan.”
  • June 10, 2008 Passed That Bill C-29, in Clause 5, be amended by replacing lines 29 to 35 on page 4 with the following: “case of a candidate, the selection date as defined in section 478.01 in the case of a nomination contestant, the end of the leadership contest in the case of a leadership contestant, and the end of the fiscal period during which the loan was made in the case of a registered party and registered association, is deemed to be a contribution of the”
  • June 10, 2008 Passed That Bill C-29, in Clause 4, be amended by deleting lines 13 to 17 on page 2.

October 18th, 2012 / 11 a.m.
See context

Edmonton—Sherwood Park
Alberta

Conservative

Tim Uppal Minister of State (Democratic Reform)

I'm happy to be here and I thank you, Mr. Chairman and colleagues, for inviting me to speak today to Bill C-21, the Political Loans Accountability Act.

I am joined by Matthew Lynch, an official from the Privy Council who will help with technical questions if needed.

As you know, this bill proposes to amend the Canada Elections Act to establish stronger rules and better transparency requirements for political loans. The establishment of high and consistent standards of transparency and accountability in our electoral system is an underlying objective of our government's larger democratic reform agenda.

This bill, as with our other efforts, seeks to increase the confidence Canadians have in the integrity of our political process. For Canadians to have that confidence, our government believes that voters must be the primary actors in the electoral process. That is why the Federal Accountability Act completely banned political contributions by corporations, unions, and associations.

Furthermore, we believe that voters must be able to participate in the electoral process on an equal playing field. Neither voters nor candidates should have privileged access to the political system solely because of their financial resources or wealthy contacts. That is why the Federal Accountability Act reduced the yearly contribution limits for individuals. That limit now stands at $1,200 per year for each category.

These principles of transparency and accountability, the primary role of citizens, and equality are the motivations behind this bill.

Bill C-21 is necessary because the regulation of political loans has not been updated to reflect the other recent changes to the rules for political contributions. Currently there are no limits on loans that corporations, unions, or wealthy individuals can grant to political entities. Right now the deck is already stacked against potential candidates who might not have connections to wealthy donors or significant wealth themselves or within their circle of family and friends. That unfairness is made worse by other loopholes that exist.

In the worst cases, loans can potentially be abused as a form of disguised contributions over and above the limits on donations that we have set. At the very least, the regulations and reporting of loans is inconsistent. The lack of limits on amounts loaned is entirely out of sync with the rest of our donation rules, and the rules on who can and cannot donate money to politicians don't apply to loans at all.

What's worse, the current rules don't provide for genuine deadlines for repayment or for genuine consequences to politicians who break the rules.

This situation needs to be fixed.

Ordinary Canadians are expected to pay back their loans under strict rules and timelines. The same should be expected of politicians.

The political loans accountability act is designed to fix these problems by making the regulation of loans consistent with the rest of our political financing and contribution system.

I'll provide a brief overview of the bill's provisions, which would apply to all political entities—parties, associations, candidates, and nomination and leadership contestants.

With respect to transparency, the bill would establish a uniform and transparent reporting regime for the terms and conditions of all loans to political entities and require the Chief Electoral Officer to publish reports on loans.

These changes would achieve greater transparency by ensuring that all political entities are subject to consistent reporting standards and that the lending practices of financial institutions to different parties and candidates are visible for all to see.

With respect to accountability, the rules for the treatment of unpaid loans would be tightened to ensure candidates could not walk away from them.

Bill C-21 would accomplish this by making electoral district associations responsible for unpaid loans taken out by their candidates. If there is no association, then the party would be responsible for unpaid loans.

Ultimately, electoral district associations and their members endorse these candidates, as do the parties and party leaders themselves. Loans that remain unpaid by those candidates need to be dealt with. We believe this mechanism would provide for the most logical, transparent, and accountable solution to that problem.

With respect to the principle that voters should be the primary influence in an election, Bill C-21 aligns the loans regime with that of the rest of our political financing regime by prohibiting corporations, unions, and associations from making political loans.

Bill C-21 would only allow financial institutions and other political entities to make loans beyond the current annual contribution limit of $1,200.

I'll also add that loans made by financial institutions, and there are literally hundreds of eligible institutions covered by this bill, must be made at fair market rates of interest.

Turning to the principle of equality, under Bill C-21 total loans, loan guarantees, and contributions by individuals cannot exceed the annual contribution limit for individuals. With Bill C-21, wealthy individuals would not be able to bankroll their campaigns by making large loans to themselves, or by taking large loans from friends or family. This places all candidates, including women and minorities, on an equal playing field.

I would also like to note that this bill incorporates recommendations made by chief electoral officers and previous input by this committee.

The bill is substantively the same as Bill C-29, which was passed by the House of Commons in the 39th Parliament but died on the order paper in the Senate. Several amendments were made by this committee and are included in this bill. Those changes include: a three-year period after which unpaid loans become deemed contributions, which this committee increased from the originally proposed 18 months; requiring the Chief Electoral Officer to hear representations from an association, party, or lender before making a determination about a deemed contribution; and providing that the amount of any loan given or guaranteed and that is subsequently paid back within the same calendar year is returned to the lender's annual contribution limit for that year.

Bill C-21 also makes a change to the contribution limits for leadership contestants. Currently, contribution limits for leadership contestants are set on a per-contest basis. Under the bill, the contribution limits for leadership contestants would be set on an annual basis, similar to the contribution limits for other political entities. I would also note that the bill would not apply to loans that were entered into prior to the coming into force of the bill. For clarity, the change from per-contest to annual donation limits to leadership contestants would apply to leadership contestants who continue to be contestants because of their outstanding unpaid loans or claims, subject to any conditions imposed on them by the rules, courts, or the Chief Electoral Officer.

The coming-into-force provision states that the bill will come into force six months after royal assent. This is consistent with the corning-into-force provisions of other electoral laws and is designed to give Elections Canada sufficient time to implement the changes.

Our government believes that Bill C-21 is essential to preserving and enhancing the trust of Canadians in the integrity of their political institutions. We believe that politicians have a responsibility to manage their funds prudently and to make sure that they are borrowing and spending within the means of their campaigns. Regular Canadians must manage their own household budgets, and it is incumbent on politicians to do the same.

I hope you will support this bill. I would be pleased to answer your questions.

Political Loans Accountability Act
Government Orders

September 28th, 2012 / 12:15 p.m.
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NDP

Libby Davies Vancouver East, BC

Mr. Speaker, I am pleased to rise in the House today to speak to Bill C-21, which would amend the provisions of the Canada Elections Act that affects loans and guarantees to political entities, whether registered parties, registered associations, candidates, leadership contestants or nomination contestants.

I am splitting my time with the member for Québec.

It is an important bill and, as I said earlier, it is a complex issue. We should recognize that when people run for leadership for a political party, it is a huge undertaking financially and in terms of a political commitment to their family, community, party and the country. It is easy to focus on some of the problems that occur, and there are problems, and that is why the bill has come forward. We should also remember the enormous sacrifice that people make, no matter what party, when they decide to run for the leadership.

The NDP just went through a leadership race. It was an incredible democratic process. We had hundreds of thousands of Canadians engaged in that process, culminating in the election of our new leader from Outremont.

When we went to the candidate meetings or had interaction with the candidates, our party could see how incredibly hard-working they were and the time and energy everybody put into their campaign teams.

We need to recognize that because politics gets such a bad name. People feel cynical and it is partly because of financial issues. Bills like this one tend to reinforce the negative side. Therefore, let us also be positive and celebrate the fact that individuals make this commitment to give that kind of public service. I wanted to begin my remarks with that because it needs to be said.

We support the bill at second reading. There will be a general rule that loans and guarantees to political entities are prohibited. There are exceptions to that. Financial institutions can give loans to political entities at a market interest rate and in writing, so that is a very clear, transparent thing. Individuals can as well, as long as they respect the limit under the act, which, as of January, was I believe $1,200, and as long as the loans are repaid, a very key point, within the calendar year or guarantees for which an individual is no longer liable in the calendar year will not be taken into consideration for an individual's contribution, loan and guarantee limit.

Finally, one of the three exceptions is that political parties or associations can make loans or stand surety for loans to a candidate or an association as long as it is in writing. There are some very clear rules.

Just by way of background, I was in Parliament in 2003 when the original bill, and I do not remember the name of it but it was under the Jean Chrétien government, came forward and reformed political financing. It sought to limit the donations to political entities from private individuals and legal persons, but at that time it did not limit political loans.

That was very important legislation and it did create a benchmark to ensure that Canadian political process and running in an election and so on was fair. It was a very historic.

I would compare us with the United States where there is virtually no rules. An individual has to raise millions and millions of dollars. Most of us could never run in the U.S. We simply would be unable to raise the kind of money as progressive people taking strong stands. We would never get all the lobbyists and so on. I always think about the situation in the U.S. where it is so much controlled by big lobbyists and big financial contributions. Therefore, the bill introduced in 2003 was very important.

In 2006 the Federal Accountability Act was the first legislation introduced by the Conservative government, and the NDP was very instrumental. I remember the member for Winnipeg Centre worked very hard with the minister at the time. That also was an important act, which lowered the maximum annual limit from $5,000 to $1,000, but it did not address the issue of political loans.

It is curious that in both 2003 and 2006, neither of those pieces of legislation from two different governments and two different political parties dealt with the question of political loans. I would like to put on the record that the NDP has always been in favour of limiting what we would characterize as the influence of third parties, both on political parties and during leadership contests.

It seems to me that the principle here is to ensure that there is transparency, that there are clear rules, that there are not ways to get around the rules and make oneself a loan or have someone make a loan that we know would never be repayable. Our party has always had an understanding, support, and advocacy for this kind of principle in favour of limiting the influence of third parties. This is why we are supporting the bill.

I would go further and say that Ed Broadbent, the former member for Ottawa Centre, former leader of the NDP, and a very well-known member of Parliament, made an enormous contribution in his time serving the House. He put forward a platform that called for transparency, clear rules, cleaning up politics for stronger accountability, and financing rules for leadership contests. That is what we are also talking about today. Sometimes we forget these things, so it is good to put on the record the work of a former colleague who really did make a difference and who espoused these principles of fairness, transparency, and accountability. I want to give kudos to Mr. Ed Broadbent for doing that.

When we debated the accountability act in 2006, we were very clear that it should have included provisions on political loans. We deplored the fact that it was silent on this matter. Again, the member for Winnipeg Centre did an enormous amount of work. We ended up agreeing as far as the bill went that we would support it, but we always believed that it should go further.

Here we are today in 2012. The bill before us has had quite a history and has already been hanging around for almost a year. It was previously Bill C-19 and C-29. It has had various versions, and here it is being debated today. I think it was the government House leader who said earlier that the government would push and convince all the opposition parties to deal with the bill. Quite clearly, for us in the NDP, we have always supported these kinds of measures and we will support the bill in principle.

I want to end on this note. This is a very complex issue. One has to really go through this stuff with a fine-tooth comb and see whether or not there are loopholes. I hope that when it gets to the committee, its members will almost look at it from a negative point of view, from the point of view of how someone can get around it. We need to ask ourselves that question to ensure that the bill is sufficient and adequate and covers the principles that it espouses. I am glad that we are supporting the bill and look forward to it being at committee.

July 15th, 2008 / 10:05 a.m.
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Marc Mayrand Chief Electoral Officer, Elections Canada

Thank you.

Good morning, Mr. Chair and members of the committee.

I am accompanied today, as the chair indicated, by Mr. François Bernier, the legal services director at Elections Canada.

I was requested by the chair of this committee to assist members in the study of the review and treatment of election financial returns and the key considerations involved in the review of these returns. In discussions prior to my appearance, the chair requested that I provide a detailed explanation of the aspects of the legislative and administrative framework that relate to political financing under the Canada Elections Act and, more specifically, of the treatment of election expenses.

This will be the subject of the first part of the presentation. I hope it will provide the committee with a better understanding of the operating context in which decisions are made regarding reimbursement of electoral expenses. I will then turn to the subject of particular decisions of interest to the committee and explain how they relate to the legislative and administrative framework.

The mandate of Elections Canada is to administer the Canada Elections Act in a fair, consistent, transparent and impartial manner. As an officer of Parliament, my first duty is to serve Parliament and Canadians. While the committee is reviewing the activities of public office holders, I trust it will understand that in my capacity as Chief Electoral Officer of Canada, I can only speak to electoral matters. I will not comment on ongoing investigations of the Commissioner of Elections Canada, or the specifics of the case currently before the Federal Court. As well, I will not deal with any individual cases.

Mr. Chairman, with your concurrence, I will now proceed with the first part of my presentation. The committee has already received a presentation that extends to a number of pages—42 pages, I believe. So I won't read each of those pages, but I will simply make the main comments on the essential aspects of the presentation.

The presentation will contain four parts: first, the objective itself, as well as a part dealing with the key principles underlying the legislation and the administration of that legislation, the key aspects of the legislation, and, lastly, the aspects of the administration of that legislation. I will also provide a brief conclusion.

I think it's fair to say that the first hundred years of federal democracy in Canada have been focused almost exclusively on the conduct of elections and on progressively expanding the franchise--the right to vote--to all Canadian citizens. In fact, the right to vote became a fundamental right protected by the Constitution and the Canadian Charter of Rights and Freedoms in 1982.

This focus continues today, as the agenda of the 39th Parliament attests. For example, Bill C-2, the Federal Accountability Act, dealt with the appointment of returning officers, who are now the responsibility of the Chief Electoral Officer. It also dealt, under Bill C-31, with the integrity of voting. It also dealt with the issue of proof of residence, under Bill C-18. And it is considering, currently, Bill C-6, which deals with visual ID; Bill C-16, which deals with advanced polling; and Bill C-20, an important piece of legislation that deals with the appointment of senators. This is all to show that there is still a focus on the electoral process and the conduct of elections.

However, over the last 40 years, growing concerns have been expressed with regard to the influence of money in the electoral process. These concerns have led Parliament to incrementally design a regulatory regime to govern the use of money during electoral campaigns. We are now at the point at which Canada is at the forefront among mature democracies in how it regulates the influence of money in election campaigns. This regulatory regime of political financing was initially built in the seventies, and it has since witnessed repeated legislative reform that continues today. Again, this Parliament passed Bill C-2, which deals with contributions and gifts and which banned contributions from corporations and unions. It is also considering another important aspect of the financial regime, under Bill C-29, with regard to loans.

My purpose today will be to deal with a particular and key aspect of our political financing regime, that of election expenses and their treatment by Elections Canada under the Canada Elections Act. More specifically, I will touch on the legislative framework, the administrative framework, and the compliance and enforcement program.

There are certain principles underlying the legislative and administrative framework. First, to maintain public trust, are transparency and fairness. These principles are expressed through various provisions in the act that deal with public disclosure, expense limits, public funding, compliance and enforcement, and, something that is often forgotten, the distinctiveness of political entities. Each has its own regime, with distinct rights and obligations.

Transparency is about disclosure. It's about providing information to electors on candidates, parties, and other entities. It involves, with regard to financial matters, reporting revenues and expenses and the sources of those.

Fairness is the key principle of a healthy democracy. In our democracy, fairness is about allowing political parties' candidates to have an opportunity to present their visions, their policies, and their values to electors. What those are and how they are communicated to electors is the exclusive domain of political parties and candidates. However, legislation seeks to ensure that the competition among political parties and candidates to secure the vote of electors be conducted within certain rules designed to create and maintain a level playing field. One area of legislation, again, over the last 40 years, has been the adoption of rules that will foster this level playing field. These rules deal specifically with how money can be raised and how it can be spent in order for them to present ideas and reach out to electors.

The Canada Elections Act passed it to the CEO to administer these complex rules, with a view to ensuring that key principles are maintained at all times. In doing so, Elections Canada must act fairly and impartially and exercise due diligence at all times. When it finds evidence of non-compliance and possible offences, it must exercise the authorities provided by the legislation in accordance with all the requirements of fairness and due process, within the strict limits of the law. To do otherwise would undermine not only Elections Canada as an institution but also the democratic process itself.

Let me turn now to the key aspect of the legislative framework as it relates to the treatment of election expenses and the role these key principles play in the electoral law.

The relevant aspects of the legislative framework involve key definitions, a brief discussion of duties of official agents, the notion and concept of election expense limits, the concept of transfers among political entities, reporting requirements for those political entities, entitlement to reimbursement, and key differences between parties and candidates. Note that some misunderstand the system and tend to view parties and their candidates as a single entity, yet the law makes clear distinctions and establishes distinct responsibilities, benefits, and obligations for parties and candidates. For the most part, these are treated independently of one another. This is particularly true in disclosure and reporting requirements, which are different for parties and candidates. Access to public funding is different. Spending limits are set differently for candidates and parties. To some extent, rules governing the raising of contributions are different for candidates and parties.

Let's first look at key definitions. Under candidate electoral campaign expenses, there are three key definitions that need to be considered: candidate electoral campaign expenses; candidate election expenses; and candidate personal expenses.

Electoral campaign expenses are expenses reasonably incurred in the election and include election expenses themselves and personal expenses. There are electoral campaign expenses that are neither election expenses nor personal expenses. An example is the audit expense in excess of the subsidy. It is an electoral expense, but it is not an election expense. There is also the rent of an office outside the rent period. For example, when a candidate rents an office before the writ is dropped or carries the office after the polling date, these are electoral campaign expenses, but they are not election expenses.

An election expense includes any cost incurred or non-monetary contribution received to the extent that the property or service for which the cost was incurred or non-money contribution received is used to directly promote or oppose a candidate during an election period. The expression “directly promote” does not refer only to expenses incurred to expressly urge voters to vote for or against a particular candidate. It has a much broader meaning that encompasses all expenses that directly assist in getting a candidate elected. For example, it includes the rental of office space, equipment in that office, the computers, the supplies, and the remuneration of campaign workers during the election period. All such expenses directly promote the candidate and are thus election expenses for the purpose of the act.

The third definition has to do with personal expenses. Personal expenses of a candidate are his or her electoral campaign expenses other than election expenses reasonably incurred in relation to his or her campaign. Personal expenses include travel and living expenses, child care, and similar expenses.

It's important to note that there are three categories of expenses, each with its own definition and standards. Election expenses must generally be disclosed. They are subject to a reimbursement, and they are subject to spending limits. Personal expenses must be disclosed, and they are subject to a reimbursement. Residual expenses that are neither personal nor for an election must be disclosed, but they are not subject to a reimbursement. Again, I mentioned previously the subsidy for audit.

Another key concept in looking at election expenses is the notion of transfer. The act allows specific political entities of the same political affiliation to move resources amongst themselves without being subject to the restriction on the source and amounts of contributions set out in the act. A contribution is the amount of money received that is not repayable; otherwise it would be a loan. It is the amount of money received that is not repayable, or the commercial value of a service or a property, or the use of property or money to the extent that it is provided without charge or at less than commercial value.

Again, this is a new, essential concept--commercial value. How is commercial value defined? It's the lowest amount charged for a property or service by the person who is in the business of providing that good or service. Alternatively, it's what another commercial provider charges for the property or service who is not in that business.

At the end of the electoral campaign, candidates must file an electoral campaign return. That return is an account of all financial transactions for an election. It consists of a form that has 15 pages and is divided into four parts. It's a bit longer than even a tax return, so there's a level of complexity attached to filing those returns.

Let me give you an example of how these concepts can come together. Let's assume that a party pools the purchase of lawn signs for its candidates and offers those lawn signs to candidates. They have the option of accepting the package or turning it down. Let's say one candidate agrees to purchase 1,000 signs for his campaign and that those signs have a value of $10,000; however, the candidate can only afford $2,000. Provided the signs are used during the campaign to promote the candidate, the return will have to show the transaction as follows. First of all, the election expense will be $10,000 for the candidate, because he received those 1,000 signs and used them during the campaign. That's the amount shown as the expense. Within that he will show the paid expense as $2,000. He will show a non-monetary transfer of $8,000, which is the commercial value of the signs that were transferred from the party to the candidate. The amount shown as the expense will be counted against the spending limit and it will be eligible for reimbursement. The amount shown as non-monetary will count against the spending limit, but it will not be reimbursed since nothing was paid for that amount.

This is a very simple example of how those transactions have to be reflected in the return.

To emphasize the critical role of money and the need to rigorously control inflows and outflows and ensure that financial activities are strictly within the constraints of the legislation, the legislation provides or requires that each candidate appoint an official agent. In fact, a candidate cannot officially run as a candidate without having appointed an official agent. This is a must under the legislation.

An official agent is much more than a bookkeeper. In fact, if we can do an analogy, he or she could be seen as a treasurer or a financial comptroller. You have on slide 9 the key duties of an official agent.

Generally, the official agent is responsible for controlling all electoral campaign expenses; that is, for a candidate's campaign, only the official agent or the candidate or someone authorized in writing can incur an electoral campaign expense. So you will understand that to fulfill his or her duties, the official agent must of course be familiar with all the concepts and the definitions I mentioned earlier and must develop a good understanding of the underlying principles of the legislation.

Let me talk briefly about expense limits. The first point to note is that there are separate limits for parties and candidates and that those limits apply to election expenses, whether paid or unpaid, and include the commercial value of non-monetary contributions or transfers.

Elections Canada calculates those limits for each in accordance with a formula set out in the act. I will not go through the specifics of the formula, except to say that, for candidates, that formula takes account of the number of electors, the population density in the riding, and the geography of the riding, and provides an adjustment for inflation.

Spending limits for parties are a little bit simpler to calculate. It's the number of electors in the ridings for which candidates are presented by the party.

For the 39th election—that's slide 13—the average expense limit for candidates per electoral district was a bit over $81,000, and for a registered party that endorsed a candidate in all 308 ridings, the limit was set at a bit over $18 million. What does that mean? One may be tempted to say that in total a party having 308 candidates could spend altogether up to $18 million for the party and up to $24 million, almost $25 million, given the limits of each and every candidate, for a total of $43 million. However, to look at it in this manner would be mistaken, as the law does not consider the political family as one entity but rather, in this case and this example, as 308 distinct, separate entities with their own rights and obligations.

Let me talk briefly about transfers. The Canada Elections Act recognizes the organic link that exists in the family of political entities, allowing them to move funds, goods, and services among themselves without treating those movements of resources as contributions. The provision of resources from one political party to another, which is not specifically provided for under the act, constitutes a contribution and is subject to the eligibility and limits set out in the act.

Transfer of expenses is not permitted, as this would render the distinct limit of parties and candidates meaningless. As you can see, it is absolutely essential to keep all those definitions and concepts as we look through various returns provided at the end of electoral campaigns.

You will find on slide 15 a table showing the transfers, what is allowed and what is not allowed. Clearly, you will see that transfers between parties and candidates are perfectly allowed by the Canada Elections Act. It has some standards, but they can move resources freely between entities.

You will note that for candidates, these movements of resources can start only after they've been officially declared candidates, meaning that their candidacy has been registered with the returning officer. You will also note that transfers to candidates after polling day are allowed only to pay for unpaid claims and for nothing else.

You will find again at slide 16 another way of looking at it. There is a triangle on that slide that shows the relationship between the party, the candidates, and the EDAs, and the respective rights and obligations for each. You will see clearly that the transfer of money, goods, and services among all three entities is allowed. You will also note that the transfer of expenses is not allowed, and you will see that Elections Canada is overseeing, through various programs, how the money flows among entities.

I should point out that for the 39th election, Elections Canada dealt with 15 registered parties that had over 1,200 electoral district associations, and with over 1,600 candidates, each with their respective agents.

On page 17 you will find a table of the transfers reported in Canada through returns for the 39th election. You will see that all parties represented in the House have transferred resources with their affiliated entities. These have taken place between candidates and parties, between candidates and EDAs, and between parties and EDAs.

The House resumed from June 16 consideration of the motion that Bill C-29, An Act to amend the Canada Elections Act (accountability with respect to loans), be read the third time and passed.

National Defence Act
Government Orders

June 17th, 2008 / 1:45 p.m.
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Independent

Louise Thibault Rimouski-Neigette—Témiscouata—Les Basques, QC

Mr. Speaker, first I want to mention something that I believe is important although it is not related to this debate. Yesterday, in my speech on Bill C-29, I talked about the lack of consideration and the unfairness that independent members have to endure. Our presence in this House is just as legitimate as that of the 304 members with party affiliation.

The Conservative government, among others, regularly seeks the unanimous consent of the House to deal with certain issues as quickly as possible. All parties and independent members should at least be informed. It is essential if we want to do our job. I repeatedly—and being as persistent as I am, when I say repeatedly, I really mean it—asked both the Leader of the Government in the House of Commons and the Chief Government Whip to have the decency to inform all four independent members. They just chose to be stubborn and took a malicious pleasure in not doing that, even when other independent members or myself were in the House when a motion was introduced.

I have no reason not to do my job by letting bills or motions go through by unanimous consent without being consulted, which means without even knowing what it is about.

As members of Parliament, the essence of our work continues to be to develop legislation that is fair and equitable. Therefore, it is only normal to know what it is that the government wants to ram through the House of Commons. That is what I wanted to say on this.

Bill C-60 seeks to correct a problematic situation created by the court martial appeal court in the Trépanier case. The fact that an accused cannot choose before which court he can defend himself was ruled inconsistent with the Canadian Charter of Rights and Freedoms, and the chief military judge more or less lost the power to convene a court martial. The government wants to break this impasse before the end of the session, to allow courts martial to be convened.

The bill also introduces other procedural changes. Most of them are clarifications made necessary by other judicial decisions, such as clarifying the limitation period with respect to summary proceedings.

Yesterday, the bill was referred to a committee, which heard experts. The committee did its job. Its report is published in the blues. The committee cancelled the transitional provision in clause 28 and ordered a mandatory review, within two years of this bill becoming law.

This not only makes perfect sense, it is also good insurance. Given the speed at which we are proceeding to deal with this issue before the end of the session, at least we can be assured that, in two years from now, this issue is going to be re-examined and it will be possible to take action.

In conclusion, I believe that legislative work can be done diligently and respectfully, and I think it is important to point this out today.

Canada Elections Act
Government Orders

June 16th, 2008 / 3:30 p.m.
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Bloc

Michel Guimond Montmorency—Charlevoix—Haute-Côte-Nord, QC

Mr. Speaker, it is a shame that there are only three or four minutes left in the debate. I almost wish I could seek unanimous consent to talk about this for another 20 minutes, but I will be reasonable.

I will explain to my colleague that the problem stems from the fact that a local candidate could incur expenses to get nominated or elected, expenses that the party could be completely unaware of, expenses that could be considerable. The individual could declare bankruptcy, and the party would be liable for the debt.

My colleague is a member of the Liberal Party. There will be 308 candidates in the next election. Some of them might end up spending excessive sums of money to get their nominations.

Why should the party be responsible for expenses that it did not even know about? That is the problem.

I see that my colleague, the member for Hull—Aylmer, is here. I managed to get an amendment in the committee to raise this absurd possibility. Unfortunately, we have to go back to the original starting point as it was set out in Bill C-29 at first reading.

The House resumed consideration of the motion that Bill C-29, An Act to amend the Canada Elections Act (accountability with respect to loans), be read the third time and passed.

Canada Elections Act
Government Orders

June 16th, 2008 / 1:40 p.m.
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Bloc

Michel Guimond Montmorency—Charlevoix—Haute-Côte-Nord, QC

Mr. Speaker, somebody keeps yapping and that is distracting me. I realize that you yourself are so distracted that you cannot take down any notes about my speech.

So there could be a breach of the spending limit. The party might not know anything about it but would be responsible for the expenditures of this insolvent person. That is the point of this amendment. I have difficulty seeing the logic of my colleagues from the other parties.

That being said, I consider that we are democrats in the Bloc Québécois, and we will acknowledge the democratic decision of the House. Allow me, however, to express some misgivings that I have.

With regard to the general thrust of Bill C-29, the Bloc Québécois remains in favour of it on the third reading. We consider that it contains some interesting, though perfectible elements, given that by definition perfection does not exist in this lowly world.

We are in favour of it for two main reasons. First of all, we think that it is necessary to provide a framework for loans so as to avoid people getting around the spending limits. We realize this on analyzing certain leadership races, among both the Conservatives and the Liberals.

For example, the member for Toronto Centre, the new Liberal Party critic for foreign affairs, apparently received loans totalling $705,000, including a loan from his brother, John Rae, a former vice-president of Power Corporation, for $580,000 at 5% interest. He apparently lent himself $125,000.

The same goes for the current opposition leader, who is supposed to have received loans totalling $655,000 from various people: Mamdouh Stephanos, Marc de la Bruyere, Stephen Bronfman, Roderick Bryden, Christopher Hoffmann. In all, they amount to $655,000.

Since we are including everyone, the current Prime Minister still refuses to reveal who his contributors were during his run for party leadership in 2002. He refers us the web site of the party once called the Canadian Alliance. That party has changed names many times. First it was the Reform Party, then the Canadian Alliance, and now the Conservative Party. It reminds me of the new Coke: it is the same recipe, but in an improved version. It is actually quite confusing.

In any case, a Globe and Mail article on October 2, 2002, revealed that the current Prime Minister spent $1.1 million on his leadership campaign in 2002. According to the article, the Prime Minister said he had posted a partial list of his contributors on the Canadian Alliance web site, but in fact only those who contributed more than $1,075 were listed. Thus, there are many grey areas.

As for election spending limits regarding contributions from individuals, we know that corporate financing is no longer allowed. We support this. Such limits have always been a traditional demand of the Bloc Québécois, that is, since 1993, for one simple, good reason. The Act to govern the financing of political parties has been in force in Quebec since 1977 and has proven effective. It has helped clean up political and electoral funding practices.

I can still vividly recall former Prime Minister Jean Chrétien paying homage to the legacy of René Lévesque, who gave us Quebec's act respecting elections and referendums in municipalities and the referendum act, among others. I am sure it was not easy for Jean Chrétien to pay homage to René Lévesque.

It is not necessarily logical, and certainly not every day, that Mr. Chrétien would pay tribute to René Lévesque.

That is basically what I wanted to say in my allotted time. Question time is approaching, and I am sure that some of my colleagues have some interesting questions for me. I will be pleased to answer them to the best of my knowledge and abilities. I want to stress that we still support this bill, and that we will likely vote in favour of it.

However, we see some serious problems with the fact that parties are responsible for expenses incurred by candidates at the local level. It should be a given that when someone agrees to run for a particular political party, that individual takes responsibility for his or her own expenses.

It is also important to remember that election campaigns are fast-paced. People who work on an election campaign have a hectic life from morning to night, and that includes the researchers who work nights. It is seven days a week. It is not always possible for all expenses to receive approval from senior party officials. That could mean that, although the party has nothing to do with the expense, it could end up being responsible, which does not make sense and is completely unacceptable.

But regardless, the Bloc Québécois supports this bill overall.

Canada Elections Act
Government Orders

June 16th, 2008 / 1:40 p.m.
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Bloc

Michel Guimond Montmorency—Charlevoix—Haute-Côte-Nord, QC

Mr. Speaker, I am pleased to speak to Bill C-29.

I am shocked by my colleague for Burnaby—New Westminster's response to my colleague for Chambly—Borduas in terms of a party's responsibility for loans contracted by candidates. My colleague just said that he was not in favour of this third amendment. I should point out that the amendments to the bill before us are a direct result of the NDP's change in position.

I do not necessarily want to dump on the NDP. We agree on certain things, but not in terms of this bill. There was a prior agreement. Given that I sit on the Standing Committee on Procedure and House Affairs, I succeeded in getting this amendment in order to withdraw this provision. It has now returned to the bill, which means that the responsibilities and debts contracted by local candidates will become the responsibility of the party in the case of insolvency.

I am on the Standing Committee on Procedure and House Affairs, a committee which is incidentally inoperative at the moment. A Conservative colleague was elected to replace the chair and member for Cambridge, whom a majority of the members had to kick out. Apparently he was not doing his job properly and impartially. A new chair was elected. Unfortunately this new chair resigned, and this means that the Standing Committee on Procedure and House Affairs, because of the Conservatives, is inoperative.

On reading the bill, I noted this problem. I agree that a local candidate has a party banner to defend. Still, in the case of the Bloc Québécois, there are 75 ridings. There are more in the case of the so-called “national” parties. The Bloc Québécois is the national party of Quebeckers. We run candidates in the 75 ridings of Quebec. When we talk about 308 ridings and 308 Conservative, Liberal or New Democratic candidates, there is a coordination problem. How do we find out what is happening at the local level? An ill-advised candidate could make excessive, extravagant, totally crazy and inappropriate expenditures. I would even go so far as to say that he might exceed the limit provided for.

Canada Elections Act
Government Orders

June 16th, 2008 / 1:10 p.m.
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NDP

Peter Julian Burnaby—New Westminster, BC

Mr. Speaker, I am pleased to rise on behalf of the NDP to comment on Bill C-29. It is very appropriate because the NDP, in this corner of the House, has been the foremost advocate of smart and democratic grassroots election financing in Parliaments throughout Canadian history.

I am standing beside the member for Winnipeg Centre who has been a very strong advocate of accountability and has spoken in the House on this bill. It is important to note that the NDP has been walking the talk on democratic grassroots election financing since the very origins of our party back in 1960 and even before that with the CCF.

It is important to note that even in the fifties and sixties, big money essentially dominated Canadian politics because we did not have the kinds of limits around election financing that we find today. How did that happen? It was another minority Parliament from 1972-74. The NDP leader, David Lewis, essentially said that the minority Parliament could only continue if for the first time in Canadian history, election financing limits were put in, both in federal parties and also in constituencies. So that was a key point in Canadian history.

It essentially drew us away from the American model, and I will come back to that in a moment, where there are essentially no limits in election financing, where big money dominates, and brought a unique Canadian contribution to election financing law. That put in place the kinds of limits today that mean that ordinary working people can run for the House of Commons and not expect that they are going to be simply outspent by bankers and big business, that essentially there is an even playing field.

It is important to note that since that first election financing act was put into place, the NDP has had a lot more representation in the House of Commons. Ordinary working families have had a lot more representation. It is not a perfect system yet, and I will come back to that in a moment as well. But essentially, the 1972-74 period was a watershed for Canadian election financing laws.

Why is that important? We see in the United States how democracy plays out, that essentially in most campaigns, particularly at the national level, we see that millionaires get elected because there is no election financing legislation that caps the amount of money that people can spend in election campaigns. We hear about $20 million, $30 million, $40 million campaigns, millionaires stepping forward and basically taking money out of their piggy-bank and then running for public office.

As a result of that, we see that the institutions governed by that lack of respect for the democratic will and a lack of responsibility to assume that there is a level playing field means that legislation does not necessarily get adopted in the interests of ordinary working families.

Here in Canada, through the efforts of Tommy Douglas, we have a public health care system that is financed by public taxes and we have that in place in Canada as a result of the work of the CCF and the NDP. We are very proud of that. In the United States where big money dominates there is still a continued effort to put in place a public health care system; 60 million Americans will not have health coverage at some point in this year 2008 which means they are only a car accident or a fall away from perhaps going bankrupt because they have to pay for their medical costs that could be $100,000 or $200,000.

In Canada, in part because we have a more even playing field, we have been able to bring forward progressive social policy. Of course, the NDP and the CCF have been at the origin of every single progressive piece of legislation brought in for social policy since Confederation.

This brings us to Bill C-29. Essentially, what the NDP has endeavoured to do over the last 30 years is gradually ensure that the level playing field does not have the kinds of loopholes that the parties that tend to represent corporate CEOs tend to like to use. We see it all the time. We put in place legislation and rather than keeping to the principle, the Liberal and Conservative parties are trying to get around those loopholes because they believe big money should dominate politics.

What we are trying to do with Bill C-29, essentially, and what we proposed in the Federal Accountability Act, the wellspring of ideas that has brought about Bill C-29, is close the loophole, that has gradually been put into place over the 30 years since the first adoption of election financing caps, to ensure a party cannot get around the legislation. First there were election financing caps and subsequent to that big corporate donations were shut down.

I remember reading the election returns when I used to work at the NDP national office. At one cocktail party the Liberal Party and the Conservative Party would receive $50,000, $60,000, $100,000 from big banks and big oil companies. Essentially, that has been shut down. It is not in Canadians' interests to have corporate donations dominate the political field. We have had that put into place.

Bill C-29 would close another very important loophole. As soon as Parliament stopped the huge corporate donations that were going to political parties, one would assume political parties would have acted ethically and morally in respect to that legislation, but that did not happen. The Liberal Party found an interesting little loophole.

Under the existing legislation, if a corporate entity loans money to a political candidate or to a political party and that money is not paid back, it becomes a donation. That is an interesting little loophole. Beautiful. We outlaw corporate donations, but a corporate entity can loan money and forget to ask to have it paid back. It then becomes a donation, a direct contravention of the principle of the law that this Parliament put into place.

The NDP saw that loophole right away. We put it forward in the Federal Accountability Act. Ed Broadbent, the former member for Ottawa Centre and Oshawa, was the foremost proponent of that. The member for Winnipeg Centre as well. This loophole allowed largely Liberal members to get around the principle of the act. That brings us to where we are today.

In the most recent Liberal leadership campaign, hundreds of thousands of dollars were loaned to leadership candidates in what was a splurge of money to the Liberal leadership. There did not seem to be any sort of cap. In NDP leadership races, we ensure that there is a cap on leadership donations. People right across the country give small amounts. Some of our leadership candidates have done very well with those small amounts. In the case of the Liberal leadership race, big money came in again with big loans.

Bill C-29 tries to close that important loophole where big companies cannot donate, but they can loan the money and it becomes a donation later.

This is an important principle. What can we say about Quebec’s Election Act? It is one of the best provincial acts. It was not brought into force by a New Democratic government—at least not so far. We certainly hope to have a New Democratic government in Quebec some day.

In any event, Quebec has adopted this principle to ensure that no more than a modest amount can be spent. So you cannot spend $10,000 or $15,000 or $20,000 or $60,000. The limit is set at $3,000, which is more reasonable.

In Canada, as a result of measures adopted by the House a few years ago, a contributor may now give a political party a maximum of $1,100. This is an important factor.

In Quebec, we have in fact seen a change, an improvement, and this has changed the face of politics in Quebec. Since then, the rules of the game have really been more balanced, and there is more discussion of ideas.

The same thing happened in Manitoba. A system was adopted to limit the contributions people can make. There is a New Democratic government in power in Manitoba, and it is governed by that same principle.

This federal principle is therefore modelled on decisions that have already been made by the National Assembly of Quebec, the Legislative Assembly of Manitoba, and other governments. It is an important Canadian principle that everyone supports. Playing a shell game to get around that principle is absolutely not in the interests of Canada.

That is the problem. We can play a shell game, because there is a way to get around the law. Since big corporations may not give money, what can they do? They can grant a loan, and later on it will become a donation.

It is hard to believe that a member of this House could object to that principle when he knows full well what progress has been made on this issue since the NDP forced the enactment of the first election spending limits, from 1972 to 1974, when we had a minority government. At that time, former NDP leader David Lewis said he wanted to establish a system that was fair to the families of working people.

Since then, we have seen progress that has allowed us to avoid the kind of activities and involvement we can see in the United States, where money buys seats in Congress and the Senate. Anyone representing working people is the exception. As a rule, representatives are millionaires, particularly in the Senate.

We do not want the same thing to happen in Canada. Certainly the House has millionaires, but there are growing numbers of members from ordinary families. The example we can cite is the fact that the NDP, which had barely a dozen members a few years ago, now has thirty.

We therefore see a net improvement in terms of members who come from more ordinary families, working families, the families that keep Canada moving. It is people from those families who built Canada and who continue to build it. It is important that these people be represented in the House of Commons. Our representatives must not be only bankers and corporate executives, they must also be the people who truly build the Canada they are part of.

What, then, is the position of the NDP on the amendments? We have had a number of good interventions on the issue. The member for Windsor—Tecumseh and the member for Winnipeg Centre have spoken to this issue.

The government has put forward three amendments at report stage. The first one would limit a person to a $1,000 loan per contest. In other words, it would reduce the amount to what is already in keeping with Canadian principles in the Elections Act to per person per contest rather than $1,000 per person per calendar year. We will be supporting that amendment.

The second amendment concerns when the three year payback period begins. We also support that amendment.

The third amendment, which we find difficult to support, is the idea that when the riding association undertakes, or a candidate or a campaign undertakes, a campaign loan, that campaign loan then reverts right back to the political party. It is a question of reasonableness.

Some campaigns can undertake their own loans right across the country. Every political party does. In the next election campaign, only two parties will be running everywhere in the country and in every region, the Prime Minister's Conservative Party and the member for Toronto—Danforth's New Democratic Party.

Everywhere in the country in the next election campaign people will have two choices, two very clear and differing views on the future of the country. I think we are seeing more and more interest in the NDP because people have seen the Prime Minister's vision and they are not quite sure they like it, particularly the corporate welfare provisions where the only thing that seems to be in Conservative budgets is tens of billions of dollars in corporate tax cuts just shovelled off the back of a truck.

The NDP has a vision that is much more in keeping with the values of Canadians, such as improving our health care system, actually dealing with the housing crisis and the homelessness crisis, and reinvesting in Canadian cities. All of those things most Canadian adhere to, but that is a little beyond the scope of the bill.

The point I am making is that in the next election campaign only two parties will be running in all 308 ridings. Other parties will be running in some ridings and not running in other ridings but only two parties will be running in all 308.

Once those candidates have deposited their nomination papers and have received the sign-off from the leader of the political party they are free to undertake loans on behalf of their campaign. They do not need to go to the national office of the political party to get approval for a loan, which is why we are opposed to this particular amendment. The amendment would mean that the political parties would suffer the consequences of a loan that a candidate and its official agent undertakes in the riding, whereas currently they are responsible for that, as they should be. They make the decisions on the ground to what extent they want to undertake a loan on behalf of their particular campaign and they have the responsibility to pay it off.

I have run in two federal campaigns and both of them were balanced budget campaigns. We feel very strongly about that. In fact, in the second campaign we did not need any loan at all because we received a lot of small contributions from people throughout the riding of Burnaby—New Westminster, which was great. However, if individuals must take out a loan, they should be responsible for it. It does not make sense that those individuals, if they run away from that loan, can simply see that loan transferred to the political party head office.

For the next campaign, for the two parties that are running full slates in every region across the country, the NDP and the Conservative Party, it will be extremely important that the local responsibility be maintained. Hopefully, the other parties that are running partial slates will be supportive of the NDP's position on this. However, for the two parties running the national campaign, running everywhere, particularly in their cases, it is important that responsibility stays with the local campaigns.

We have talked a bit about the origins of the election financing act and how things have evolved since then. The NDP has been the chief spokesperson and the principal advocate of putting into place election financing rules that are in keeping with the values that Canadians share from coast to coast to coast.

Canadians believe there needs to be a level playing field in a political contest and that everyone needs to have the same rules apply. They do not believe in loopholes. Therefore, when a Liberal Party member tries to move around the idea that we cannot have corporate financing by getting a loan and converting it into a donation, that is something that must be stopped. That is why we are supportive of this legislation and of most of the amendments.

We believe Canadians support the values of a level playing field, equal participation in politics and accessibility in politics so that an individual, a former manual labourer, can be active in his or her community, can run for political office and can actually be elected because the rules are such that it is a debate of values and ideas rather than simply a contest of who has the biggest wallet.

Speaking as a former manual labourer who is very proud to be in the House of Commons, our election financing act must do just that.

Canada Elections Act
Government Orders

June 16th, 2008 / 1:05 p.m.
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Bloc

Yves Lessard Chambly—Borduas, QC

Mr. Speaker, first I want to congratulate my colleague on his speech.

I heard the answer he just gave to the Liberal member. I do not want to ask him a trick question, but I would like him to elaborate on what he said. We know that the two main pillars of democracy are freedom of speech and transparency. Heaven knows the Conservatives have shown a total lack of transparency regarding several issues that normally should have been submitted to the House in a clear and precise manner. With regard to these two main pillars, can Bill C-29 be compatible with what the member said when we have to ensure that any person who wants to run for office has an equal chance, whether his or her party is strong or weak in the polls? I want to hear what he has to say on how we can reconcile these two concerns.

Canada Elections Act
Government Orders

June 16th, 2008 / 1 p.m.
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Liberal

Paul Szabo Mississauga South, ON

Mr. Speaker, Bill C-29 has some good points to it. There is one however, and I want to ask the member's view on it. It has to do with unpaid loans by a candidate which, if the bill passes, would become the responsibility of the riding association. That may put some riding associations in an awkward situation. I can say that from experience, because the same practice applies provincially where any debts of a candidate become the responsibility of the riding association. In one particular case, in fact in Mississauga South provincially, a candidate who was appointed by the party, not selected by the riding association, had a very substantial and irresponsible level of spending and ran up a $26,000 debt which had to be assumed by those who had absolutely no control over how that spending was done.

In cases such as that, it would seem to me that riding associations would not have very much recourse and may find themselves with a substantial debt of which they had absolutely no control over the spending, nor the resources to repay. I am not sure whether that really hits the target squarely with regard to that provision whereby unpaid loans would automatically be the responsibility of a riding association. I wonder if the member has some comments on that.

Canada Elections Act
Government Orders

June 16th, 2008 / 12:55 p.m.
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Bloc

Paul Crête Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC

Mr. Speaker, Bill C-29, which seeks to close loopholes in campaign financing, is a good bill in and of itself, with the exception of the matter that was rejected by the government at report stage, with the support of the NDP, allowing a candidate to incur expenses without necessarily obtaining the party's authorization. The party would then be responsible for those expenses. That seems to be an aberration. However, we still believe that there are enough positive changes in the bill as a whole to support it.

We believe that the legislation should cover loans in order to close loopholes pertaining to financing limits. We would like to remind members that these limits were established as a result of a fight led by the Bloc Québécois in the past requiring that corporate contributions be prohibited and that individual contributions be limited, as has been the case in Quebec for 30 years.

I have been a member of this House for 15 years and I remember an epic debate that took place under the former Liberal government. As Mr. Chrétien's term of office was winding down, the situation was significantly improved by allowing only individuals to make contributions. With this bill, we have gone even further, and that is a very positive aspect of democracy.

Often, when people in other countries have governance difficulties, one of the sources of their problems is actually linked to electoral practices that do not measure up to the requirements of democracy. They deserve better support. So the actions taken today are part of a development we are familiar with, which deserves to be supported.

The Bloc Québécois and Quebec as a whole have really made an interesting contribution in this regard. In Quebec, the Election Act, which was amended during the time of René Lévesque in the 1970s, now serves somewhat as a rule at the federal level, and that is good. It makes for a healthier democracy. It also requires us to seek money from a multitude of people, and thus reduces the excessive impact some contributors have on political parties. In this regard, we are headed in the right direction.

This bill corrects another problem in the Federal Tort Claims Act. During consideration of Bill C-2, the Conservative government was more interested in getting its bill passed in a hurry than in dealing with problems of ethics. In the present context, we realized that some things needed to be added. At that time, the opposition parties, the media and Democracy Watch had raised the problem, and the government refused to act. In the current context, we are correcting some of these situations.

For example, the bill corrects the problem of loans that made it possible to get around the limits on political contributions. In this connection, there are some important points concerning the poor protection of whistleblowers and the lack of reform of the Access to Information Act. However, as far as the problem of loans is concerned, we realized in the past that these loans served as crutches to compensate for the fact that a candidate or a party had not raised enough money. This situation was particularly prevalent in leadership races. We realized that something the new Canada Elections Act did not permit was happening through the back door, that is, raising very large amounts of money from one or two individuals who were providing loans. The aim is to correct this situation.

When this bill was introduced, it was pointed out that during the last leadership race several Liberal candidates took out large loans in order to get around the financing limits in the way I have just described. While it is true that quite a few have acted in this way, it should not be forgotten that the Prime Minister himself did not reveal all his contributions during the leadership race in 2002. So the Conservative Party was not really in a position to lecture anyone. We have also seen it in the past seven years, given the scandals we now know about.

It is necessary to prevent the law from being circumvented by introducing new limits for political contributions. For example, an individual can contribute $1,100 annually to a registered party or to a candidate. The amount a union can contribute annually to a registered party has been reduced to $0. That shows a significant shift in terms of the respect owed to the people who give us our mandates—the voters. It is still possible to circumvent the limits by using personal loans. That will no longer be the case. The example was given of the candidates for the Liberal leadership.

We have corrected many other issues in Bill C-2 that were not adequately addressed in the Federal Accountability Act.

Other ethical problems persist. Even though Bill C-29 corrects the problem of loans that allow candidates to circumvent political contribution limits, there are still many ethical problems that were not fixed by Bill C-2.

For example, many Conservative campaign promises in terms of whistleblower protection did not make it into the Federal Accountability Act. Notably, the Conservatives said that they wanted to “ensure that whistleblowers have access to...legal counsel”. Yet the Conservative bill allows for only $1,500 in legal fees. They also wanted to “give the Public Service Integrity Commissioner the power to enforce compliance with the [whistleblower act]”. Finally, the Conservatives promised to “ensure that all Canadians who report government wrongdoing are protected, not just public servants”.

We understand that Bill C-29, as a whole, will improve the situation. We would have liked it to clarify the situation of candidates who incur expenses for their party, unbeknownst to the party, which would then be liable for them. However, because of the overall improvements it proposes, the Bloc Québécois believes that this bill should be supported.

Canada Elections Act
Government Orders

June 16th, 2008 / 12:30 p.m.
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NDP

Joe Comartin Windsor—Tecumseh, ON

Mr. Speaker, I rise to speak to the bill, as opposed to some other times when I rise in the House and really wish I did not have to speak. The bill is definitely a step forward in the reform of our democracy overall, specifically the reform we are pursuing in political financing of election campaigns, both general campaigns and leadership campaigns as well as nomination meetings.

In that regard, this type of reform has been needed for quite some period of time. Prior attempts to reform the system have been made. We saw the Federal Accountability Act passed in this current Parliament. We saw significant reforms, which I think we all applaud, in the prior parliaments of 2000 to 2004 in particular.

However, this was an area where there was a glaring loophole left. We saw that, particularly in the last leadership race by the federal Liberals. A large number of candidates took out very substantial loans to finance their campaigns, in some cases approaching as much as a million dollars, loans that were left owing when the campaign was finished. Although there are mandates to repay those loans, there is no provision of any serious consequence where the lender on the loan had opted to forgive the loan.

We can see where the huge potential for abuse can lead. In most cases, we have very clear guidelines on how much can be spent in campaigns, including leadership campaigns. This is one of the areas where we need further reform, so there is a clearer accountability of where the funds have come from and how they are spent. In fact, we need more detail in those accounting reporting functions.

However, what this left opened was people could come forward as candidates for leadership or running for the nomination in a riding association and could borrow extensive amounts of money to fund those campaigns from family or close associates, business associates perhaps. Then when the campaign was all over, the limits that we had imposed on donations, the cap we had put on donations, could be easily exceeded by the people who had advanced the loans, saying, “I understand you're in dire financial straits, I'm not going to ask you to repay the loan”.

We saw that repeatedly happen. I often wondered, even prior to some of the reporting we now have in place, how often it happened of which we were not aware.

Therefore, we are taking a significant step forward under Bill C-29. We are placing very clear guidelines on from whom funds can be borrowed, and that is primarily the lending institutions of our country, not private individuals. There are limits on how much can be borrowed as well. It is a major step forward. I do not think it is the end of the day.

I remember sitting in committee one time and listening to two delegations, one from the province of Manitoba and one from the province of Quebec. They had started the program of financial reform in political financing and political donations in particular, much ahead of where we did at the federal level. It was interesting to listen to them. In both cases they said that what we had to do was continue to monitor, at least after every election and leadership campaign, to see if some creative person had come forward with an idea, a way to get around the restrictions and legislation, which thought we had put in place and which we thought were solid and absolute,

We are seeing that to some extent in the scandal of the Conservative Party's in and out scheme, which Elections Canada clearly found improper and contrary to the legislation. That was the Conservatives' creative attempt to get around the financing laws during a federal campaign. Hopefully at the end of the day they will have their wrists severely slapped, they will be penalized, et cetera, and we will put an end to that one.

In this case, what happened with the accountability act and some of the reforms we saw under the Liberal administration was that the issue around the loans was not dealt with. We are now dealing with it in Bill C-29. I think we have covered all the bases on it, but it will require ongoing monitoring. If we do not have that, we can be almost certain that someone will figure out a way around it and we will then have to move back in as a legislature to close whatever loopholes are found.

In addition to this legislation, we have additional democratic reforms. The current Prime Minister was very strong in opposition and in both federal campaigns in arguing for all sorts of democratic reforms.

We know we need reforms within this House to deal with the decorum problem we have in this House and to deal with the problem of actually democratizing the institution. In particular, right now we can see the need to deal with democratizing our committees. We need to deal with making them stronger and more independent of the party in power in particular, but also of the leadership of the parties, so that we as members of Parliament can act more independently and also more representatively of our constituents. Those reforms are needed.

We expect that we are going to need additional reforms once we see how the Federal Accountability Act works in the next federal general election. I expect additional reforms will be called for.

There are certainly reforms that need to be made to the electoral process. As members know, the NDP has been a strong proponent for a long period of time of a form of proportional representation so that everybody's vote counts the same. This is another reform that needs to be undertaken.

The point I am trying to make here is that although this is a relatively small act, it is another step along the route we have to take, that we as members of Parliament have a responsibility to take, to see to it that as much as possible we make our country, our electoral process and our democratic institutions as absolutely democratic as possible.

Attached to this is something that one would almost say is just so obvious that we should not have to say it. There has to be accountability in the process and there has to be transparency. The average citizen has to understand how the process works, both in terms of election financing and in terms of the process here in the House and during the elections.

The point I want to make as well with regard to Bill C-29 is what we hear more about from the Liberal side of the House, which is that we really do not need this kind of restriction. We hear that we simply could put in place a regime that would set out how much money a candidate has spent, with no cap on it, and how much a candidate still owes, with all of it just being an accounting process. The accountants in the country would love that, I am sure.

All we have to do is to look to other jurisdictions to see where they have followed that type of regime. I am going to point to the United States in particular, where there are no caps on what a candidate can spend, from whom a candidate borrows, and whether a candidate pays it back. There are very few restrictions.

What we see there is that if someone wants to be a senator, for instance, he or she starts from the fact he or she is going to have to raise millions and millions of dollars to get elected. Quite literally, and I know the Americans hate it when we say this, a person can buy an election at the senate and congressional levels in the United States, because effectively there are no limits on how much one can spend.

On paper it looks like there are some limits, which goes back to the accountability. The reality is that there are none because of the political action committee fundraising methodology they employ there.

We see this even in small states. Members may remember the incident in New Jersey involving an individual who was a multi-millionaire, almost a billionaire, and who spent something like $60 million in trying to buy his senate seat. And he did win it.

He swamped the opposition with advertising, with people working door to door, and with all kinds of promotional material. He was able to use all the things that we could use if we were allowed to spend that amount of money. However, anybody who does not have access to those sources of funds, either personally or through contacts, is in a totally impossible position in regard to making the democratic process function.

It really is important that we pass Bill C-29. I believe from the comments we have heard that it obviously is going to go through.

I want to finish with the caution I heard in that committee from both the province of Quebec and the province of Manitoba. We have to be eternally vigilant.

After the next election, we will have to look at this piece of legislation. We will have to look at the Federal Accountability Act, other political financing acts and other electoral processes to see if somebody has figured out a way to get around the rules. If so, then we will have to move again to close any loopholes that have developed.

The House resumed from June 13 consideration of the motion that Bill C-29, An Act to amend the Canada Elections Act (accountability with respect to loans), be read the third time and passed.