Bill C-21

Jean-Pierre Kingsley Former Chief Electoral Officer, As an Individual

Thank you very much, Mr. Chairman.

Mr. Chair, members of the committee, appearing before this committee is always a great pleasure for me. I see there is continuity, both in the chair and among certain members.

I have had the opportunity to examine Bill C-21, mainly its objectives, and the testimony of the Chief Electoral Officer and representatives of the Canadian Bankers Association. My opening remarks will only take about eight or nine minutes. I would like to recall that the Canadian system, the Quebec system for controlling funds, has made Canada, Quebec, a world leader in the control of money.

Canada understood a long ago that if the system did not control the money, the money could easily control the system. It is important to bear in mind that you are examining what I would call the most refined points in the control of money. We are not dealing with absolutely atrocious scandals, but it is very important to solve the problems that may arise as a result of the present definitions.

I really liked the analogy that one of the committee members made, that money is like water, in that it can seep into all the cracks. It seeks equilibrium, but moves downward. I have previously said that the smallest crack could eventually allow a Garda or Brink's truck to drive through it. So it is very important to make sure there are no cracks.

I share the concerns expressed by the Chief Electoral Officer regarding the complex nature of the proposed system and those concerning certain aspects on which you might focus your attention. I agree that there is a need for complete transparency and periodic reports that would be made public. I also agree that only financial institutions should be allowed to make loans. That moreover is the recommendation I made before I left my position in 2007.

Two options are possible here.

If the loan is unpaid by the agent at the end of the three years, the EDA would pay. If the EDA cannot pay, then the party would pay. This would obviously mean that the party may wish to get involved, but that is something for internal workings of parties. It would certainly start getting people to be more responsible about the loans that are taken out.

The second thrust would be to allow loans to leadership contestants, again from financial institutions only, up to an amount approved by the party for the leadership for three years, keeping in mind that parties don't have ceilings. There's no ceiling in the law. Parties are free to set the ceilings on expenditures. They may well be entitled to set ceilings for their candidates. Obviously the logic is if it's unpaid at the end of three years, then the party pays. Again, this would instill a sense of reasonableness in the process.

I also note that in their testimony, the banking association representatives stated that grounds for loans would be economic. They would make money available based on the ability of the person to repay and their ability to make money in the process. I took a lot of comfort from that, realizing that no political grounds would be invoked for turning down a loan. That came back to Mr. Reid's concern about independent candidates and candidates from smaller or marginal parties with ideas that are not yet mainstream.

The result would be that the debt would be finalized. It would be off the books. One would have achieved separation of the member of Parliament from the debt. There would be no more undue influence, no potential for it, no perception of it in the minds of the public. The CEO—the Chief Electoral Officer—and the courts would no longer be involved in extending this very complex system. It would be simple to administer, and parties and EDAs would effectively have control over the system to instill responsibility.

In a nutshell, that is the suggestion, sir—not the recommendation, not the proposal, but the suggestion I would like to make to the committee for further discussion.

The objective of Bill C-21, in my view, is it seems to remove the reality, the perception, or the potential of undue influence on a member of Parliament or on a party leader through loans.

The capacity to exceed the contribution limit by the back door is essentially what you're trying to shut down. I thought I would make a suggestion to you for a very simple system, based on the view that the more complex the system, the more tangled the web that is woven, to quote somebody who is well known to most of us.

As I mentioned earlier, in my view—and this I think is the purport of the bill—only financial institutions should provide financing to parties, to candidates, or to any emanation in the political sphere. The terms and the conditions should be made public, and as soon as possible. I struck out “immediately” in my notes, realizing that “as soon as possible” may be better.

There are essentially two broad strokes to what I'm going to suggest to you, allowing for the fact that they may well be shot down and hoping that people will keep in mind that I've been absent from this particular statute for five years now.

I would suggest that loans to nomination contestants and candidates—from financial institutions only—would be only up to an amount approved by the electoral district association, and only for the maximum of three years that we're talking about. The maximum amount could be up to some percentage of the ceiling that may be spent on the campaign, and it could be based on what the EDA itself wishes to establish, so that the EDA would have something there.

Anthony Polci

A more general statement in response—I would say banks take their responsibilities quite seriously. How banks conduct themselves in political financing, whether it's under the regime proposed in Bill C-21 or in provincial financing regimes, is ultimately a bank decision, an individual institution decision. We have a competitive marketplace. They are competitors with one another. They will take a number of factors into consideration in their approach.

In terms of the public duty aspect—if that's the question—the political process can be widely defined in terms of the participants. You use an example of a couple of parties. There's a good, proper understanding of the main parties that are involved in the political process and their viability and their staying power, if you will. If there's a suggestion perhaps that banks should be providing loans under any circumstances to any political party, there ultimately becomes a conflict with the prudential regulation because banks do lend to get the money back. We are regulated by the Office of the Superintendent of Financial Institutions. The lending that is undertaken by banks is lending that Mr. Wrobel has referred to. It is undertaken consistently to assess and manage risk, and to ensure repayment. That ultimately has to be the final decision.

That's probably the perspective that banks come at this from. For that public duty aspect, you have to look at how broad this can become in terms of an equation.

Anthony Polci

At the end of the day, the bank is not lending to the individual, so the personal credit history is not the relevant feature; it's their ability to have a campaign that is, as I said, a viable campaign. You're not collecting from the individual; you're collecting from the campaign in terms of repayment of the loan. It is that entity that matters. You have to assess, can they fundraise? Is the rebate part of the equation?

So the personal credit history, the way Bill C-21 is structured, is not a part of that assessment.