Political Loans Accountability Act

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

This bill was last introduced in the 41st Parliament, 1st Session, which ended in September 2013.

Sponsor

Tim Uppal  Conservative

Status

In committee (House), as of Oct. 2, 2012
(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

  • Oct. 2, 2012 Passed That the Bill be now read a second time and referred to the Standing Committee on Procedure and House Affairs.

Political Loans Accountability Act
Government Orders

September 28th, 2012 / 10:05 a.m.
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Regina—Lumsden—Lake Centre
Saskatchewan

Conservative

Tom Lukiwski Parliamentary Secretary to the Leader of the Government in the House of Commons

Mr. Speaker, it is a pleasure to resume debate on Bill C-21. I last spoke to this bill in December of last year. Unfortunately the time was not sufficient for me to complete my presentation, so I would like to continue, but before I do, I would like to point out a few elements of Bill C-21 that I spoke to in December.

It is very important for all members to understand the reasons Bill C-21 has been introduced and some of the elements of the bill that will make the political loans regime a much more fair, open and transparent process for all parties and for all candidates.

Without question the rationale for Bill C-21 and its genesis came as a result of the 2006 Liberal leadership campaign. As most members know and most Canadians know, there were several candidates who contested the leadership for the Liberal Party in 2006 who still have outstanding debts, in some cases, several thousands of dollars of debt. In fact there is one sitting MP, the member for Vancouver Centre, who was a nominated candidate for the leadership of the Liberal Party who has still yet to repay her debts.

We believe that to be absolutely unacceptable. Bill C-21 would remedy that.

I also want to point out that Bill C-21 will prevent individuals from lending money to leadership contestants. That is important because in the past there have been abuses of the loans regime. Let me give an illustration. Under the regime that we are currently working with, a wealthy individual, friend or relative could lend money to a leadership campaign candidate and have absolutely no realistic expectations of that loan ever being repaid. In fact, there could be times when an agreement would be struck between the lender and the candidate, and the lender would assure the candidate that he or she would never have to repay the loan because the lender would simply write it off.

If that happened, it would be a clear abuse of the political loans regime and a clear abuse of the rules. Yet there is nothing under the current Elections Act provisions to prevent that from happening. If that happened, the so-called loan would in fact not be a loan at all. It would be a donation. It would be a contribution and there are laws and rules in place to prevent contributions from exceeding a certain limit. In order to prevent that type of abuse from occurring, Bill C-21 will prohibit individuals from lending money to leadership candidates.

In future, after Bill C-21 is adopted, only registered financial institutions, whether they be chartered banks, credit unions, caisse populaires, trust companies, et cetera, will be allowed to lend money. In addition, those institutions, as is the normal practice, will have to openly transmit their practice of lending, the interest rate, the terms of repayment and all other information that should be in the public purview and in the public domain.

Bill C-21 will bring into force provisions that will increase accountability and transparency. Overall it will give the public the assurance that there are no abuses in the leadership or any candidate's campaign. I say that because Canadians have told us loud and clear that they do not agree from time to time with the regime of political donations exceeding the Federal Accountability Act levels.

However, abuses have occurred. I think all of us here can point to at least one or two examples where abuses have occurred, and unfortunately, the Chief Electoral Officer and Elections Canada are prevented from doing anything meaningful to stop them. Bill C-21 would do exactly that.

There are a few other provisions in Bill C-21 that are not only timely but would assist all candidates in a leadership contest from incurring these debts, or at least would assist them in the repayment of their debts.

We have read media reports recently where one of the candidates in the 2006 Liberal leadership campaign, Ms. Martha Hall Findlay, has stated that because of the current rules she has found it difficult if not outright impossible to repay her debt, which she still has six years after she ran for the leadership of the Liberal Party.

Ms. Hall Findlay says the reason it is difficult to repay the debt is that under the current provisions donations from individuals to a leadership candidate may only be given on a per-contest basis. In other words, since Ms. Hall Findlay ran for the leadership in 2006, her supporters who wanted to give the maximum contribution allowable, roughly $2,100, could only do so once because the rules say a person can only give one donation to one candidate for one contest.

Bill C-21 would change that so that individuals could give contributions to a leadership contestant on an annual basis. In fact it would allow existing debts to be paid off by allowing the same contributor to donate yearly to the maximum amount. This would assist candidates like Ms. Hall Findlay and others who have existing debts to pay off their debts.

In fact, Ms. Hall Findlay has stated publicly that if the provisions of Bill C-21 were in force today, she would have her existing debt paid off in three days. I am not sure if that is an exaggeration or not, but we will see when Bill C-21 comes into effect how quickly Ms. Hall Findlay and other outstanding debtors pay off their debts.

Finally, in the limited time that I have, I want to refute a political argument, or at least a political piece of rhetoric, that has been coming from the Liberal Party lately. It suggests that our government has delayed bringing Bill C-21 forward because we want to let those leadership candidates from 2006 continue to twist in the wind. Nothing could be further from the truth.

We have continually, over the last several months, asked the opposition parties to give their tacit approval to Bill C-21 so we could debate it, send it to committee, after which speedy passage would then ensue. Until two days ago, we had not had that agreement. However, on Wednesday of this week, after several months of trying to get agreement from the opposition parties, we finally got their commitment to allow Bill C-21 to go forward with their support.

That is why today we are hoping the debate will end and Bill C-21 will be voted upon at second reading to send it to committee. We want Bill C-21 to come into effect. I know all Canadians support it. Hopefully, the opposition parties will as well.

Political Loans Accountability Act
Government Orders

September 28th, 2012 / 10:10 a.m.
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NDP

Libby Davies Vancouver East, BC

Mr. Speaker, the member opposite gave a very good summary of the bill before us.

As he knows, the NDP is supporting the bill at second reading, but I do have a couple of questions and they are real questions, actually.

This whole issue of financing political loans and raising money gets very complex. I wonder whether he thinks there are any loopholes that, if this were to pass, could possibly give an out in some way that would allow someone to go through the back door. I think that is the way we have to look at the bill.

Also, in terms of the current situation, where there are candidates who did not win and are now in arrears under the Canada Elections Act and will possibly get fined, what would their status be pending this new bill? Would the new bill be retroactive in terms of these candidates who have outstanding loans that have now gone beyond the limit? What would their status be?

Political Loans Accountability Act
Government Orders

September 28th, 2012 / 10:10 a.m.
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Conservative

Tom Lukiwski Regina—Lumsden—Lake Centre, SK

Mr. Speaker, in answer to the first question about loopholes, I would not want to suggest there are no loopholes. That is why bills have to be examined carefully at committee.

However, there is something that the committee, during its examination of Bill C-21, should consider. As written, Bill C-21 states that if candidates at the local riding association level fail to repay any debts they incurred during their candidacy, the registered association or party would then be responsible for their debts. That is a good thing, so there cannot be any debts written off at the local level.

Bill C-21, however, does not provide for any debts incurred by leadership candidates of a registered federal party to be backstopped by the federal party. In other words, if someone runs for the leadership of the Liberal Party, and we know that the Liberals will be entering a leadership campaign shortly, whoever wins that campaign is obviously going to incur some debt. All candidates do. If the candidate becomes leader of the Liberal Party and still has unpaid debt after several years, Bill C-21 does not allow, or does not oblige, the federal Liberal Party to pay that debt. It does at the local level but not for leadership candidates at the federal level.

We may want to examine that at committee to make the same provisions at the federal leadership level as we do at the candidate level.

With respect to whether it is retroactive, right now leadership candidates from 2006 in the Liberal campaign have this debt encumbrance. Bill C-21 would allow the new rules to come into effect for existing debt, but everything else would be on a go-forward basis. Bill C-21's provisions would only apply after it comes into effect, with the one exception being existing debt.

Political Loans Accountability Act
Government Orders

September 28th, 2012 / 10:15 a.m.
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NDP

Alexandrine Latendresse Louis-Saint-Laurent, QC

Mr. Speaker, I would like to thank my colleague for his speech. We are pleased that this bill has finally been introduced in the House.

I would like to ask him a question about something he said at the end of his speech. He said that it is not true that the government delayed this bill. Yet the bill has been languishing for nearly a year since it was introduced. Why have the Conservatives not made more of an effort to consult the other parties over the past few weeks to get their support?

Why did this take so long?

Political Loans Accountability Act
Government Orders

September 28th, 2012 / 10:15 a.m.
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Conservative

Tom Lukiwski Regina—Lumsden—Lake Centre, SK

Mr. Speaker, the reality is that we have been trying for well over a year, since Bill C-21 was first introduced, to get agreement from both opposition parties. We had agreement from the official opposition for many months. It wanted Bill C-21 to go forward.

The difficulty was trying to get agreement from the Liberal Party. I do not know the rationale behind why the Liberal Party did not want Bill C-21 to come forward for further debate but that is the reality. Finally, as I mentioned two days ago, the Liberals indicated to us that they would be willing to support Bill C-21 to at least send it to committee.

We would have had Bill C-21 at committee many months ago if we had agreement from the opposition parties that they would support it. Even though we have a majority, the reason their support is necessary is that House time is very valuable and we do not want to introduce bills that will be delayed unnecessarily by filibusters, amendments and hoists, all of which are available technically and from a procedural standpoint to the opposition parties to delay passage of a bill.

Rather than trying to delay House proceedings by introducing Bill C-21 when it would not get support from the opposition parties, we kept trying to negotiate behind the scenes with them, to ask them to let us know when they were finally ready to offer their support. We got that acceptance on Bill C-21 two days ago. It is introduced today. I fully expect debate to conclude today, which means we will probably be voting at second reading next week.

We want Bill C-21 to be passed. We have wanted it since we introduced it. Now that we finally have support from the opposition parties it will go forward.

Political Loans Accountability Act
Government Orders

September 28th, 2012 / 10:15 a.m.
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Edmonton—Sherwood Park
Alberta

Conservative

Tim Uppal Minister of State (Democratic Reform)

Mr. Speaker, my colleague made a very good speech and provided an explanation of the bill as well.

It is great to have this co-operation with the opposition on moving this bill forward. We would like to see this co-operation on other bills, including the Senate reform bill. We would like that bill to move forward as well.

We cannot blame Canadians for having a perceived sense of undue influence on politicians if they see unions, wealthy individuals or corporations lending money and that money never really being paid back. It is essentially an abuse of a loophole.

How does the member see this bill building and ensuring trust in our democratic institutions?

Political Loans Accountability Act
Government Orders

September 28th, 2012 / 10:20 a.m.
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Conservative

Tom Lukiwski Regina—Lumsden—Lake Centre, SK

Mr. Speaker, I thank my colleague, the minister responsible for democratic reform, not only for the question but for his leadership on this file and for introducing Bill C-21 to begin with.

He has asked a very good question. I think I referenced in my speech that Canadians have many concerns regarding the entire political process. Some Canadians feel there are too many loopholes which allow politicians from all sides of the House an opportunity to abuse existing rules when it comes to political financing and political loans.

This bill goes a long way to giving the general public the needed assurance with respect to financial transactions when dealing with leadership campaigns that contribution limits, et cetera, will be adhered to, because Bill C-21 does close a number of loopholes. I mentioned the most obvious. Bill C-21 will prevent individuals from lending money to candidates. That has been the biggest source of abuse that we have seen.

In past leadership campaigns, in opposition parties in particular, we have seen a steady pattern of wealthy individuals lending several thousands, and in some cases, hundreds of thousands of dollars to a leadership candidate with no obligation for the candidate to repay the loan.

I say “loan” very suspiciously because if there was an agreement at any time between a candidate and a lender, where the lender said, “I will give you $100,000 for your leadership campaign and don't worry, brother, you'll never have to repay it, because I'll simply write it off”, it would not be a loan; it would be a contribution. That would seriously violate the current election financing and Elections Canada laws with respect to contributions to candidates.

We want to see that potential abuse stopped. Bill C-21 does exactly that. It closes the loopholes that have existed for far too long.

Political Loans Accountability Act
Government Orders

September 28th, 2012 / 10:20 a.m.
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NDP

Alexandrine Latendresse Louis-Saint-Laurent, QC

Mr. Speaker, since I am opening the debate today for my party, I would like to provide some background for the people who are watching us. There must be quite a lot of them this Friday morning.

In 2006, during the Liberal Party of Canada leadership race, some of the candidates took out campaign loans that they have never been able to repay in full. In so doing, they violated the Canada Elections Act.

The public will understand that those unpaid debts represent, in a sense, illegal loans. The money was used. So it represents an unfair advantage, even if the candidates were defeated or withdrew from the race.

In an election campaign, every penny counts. Everything is recorded, measured and filed. That is the surest way to be certain the electoral process is absolutely transparent and is not usurped by elements that have too great a vested interest or are too wealthy.

We can see this in a number of other countries in the world: money and power often coincide and sometimes are simply indistinguishable. Plutocracy, mafia states, tax havens and the rest are more the rule than the exception. When Canadians find themselves looking at governments like those, they shrug their shoulders and dream of Westminster parliamentarianism, as unshakable and incorruptible as the Rock of Gibraltar.

We have confidence in our democracy. Just as well, because the world is already dark enough.

Bill C-21 is one more step we are taking to make sure our system continues to be incorruptible and reliable.

Certainly, in the case of the four unsuccessful candidates for the Liberal leadership, none of it has anything to do with the forces of darkness. It is simply a case of biting off more than they could chew. The candidates borrowed more than they could repay.

When it came time to clamp down on those abuses, no one really knew what to do. I note that these events date from 2006. A lot of water has passed under the bridge since then. There have been two leaders, who have seen their party’s fortunes decline with each election. The Liberal Party has found itself, little by little, packed into the back of the House.

There is still no resolution in sight.

Recently, the Ontario Superior Court delivered a judgment convicting the four individuals at fault. The judgment says there was a violation of the Canada Elections Act, and the guilty parties have to pay a fine of $1,000 or serve a custodial sentence of three months.

I want to say immediately that I have some reservations about the seriousness of the crime, because we do have to be honest with the public, who may not have followed the case closely. The embarrassment these four candidates have experienced has been widely exploited by the Conservative Party in its never-ending war of blind hatred for the Liberal Party.

The debts of these four candidates would have been repaid long since if the rules had not been tightened just at the right time by the government, which for once demonstrated Machiavellian skill. What a surprise. Ordinarily, its big, finely orchestrated schemes are about as airtight as a Zeppelin on fire.

Political game-playing has therefore played a big role in dragging this situation out beyond all reason. Officially, Bill C-21 is an attempt to prevent abuses like this from happening again, but let us be frank: everyone was very happy to be able to heap scorn on the guilty parties for as long as possible.

Personally, I find that cruel and stupid. But in politics, it is all a game of tug-of-war. Everyone loves a good fight. Leave your flank exposed and you will be knifed. These malicious rules are so widely accepted that even the victim applauds.

It is malicious, but apparently we must accept it and make the best of it.

Fine. And so I have the honour of announcing a first. I rise today to support the government’s bill. Surprise.

I hold no illusions as to the motives that have prompted the Conservatives to tighten the party financing rules, nor do I believe that this is a particularly brilliant effort at legislating, but what can you do? It is a sort of a step in the right direction.

If my enthusiasm seems a little lukewarm, it is because I see all too well the childish political games hiding behind this bill. This is the fifth attempt the Conservative government has made since it came to power to reform party financing. It has dragged the process out long enough to entrench the offence and prevent it from being resolved.

The Chief Electoral Officer has said that any offence under the Canada Elections Act relating to financing is very difficult to punish properly. Today, we are seeing that ourselves for the umpteenth time. It all dates back to 2006, before the Conservatives came to power. The Chief Electoral Officer has even told me, and it is very clear, that the law as it is now written is “not only overly complex, it’s incoherent and ineffective”.

And we have the evidence of that as well. Eight years later, nothing has been done. The Chief Electoral Officer has repeatedly asked Parliament to resolve the many problems associated with the law regarding loans.

As my colleague the parliamentary secretary said just now, one of the biggest changes proposed in Bill C-21 would amend the limit on donations by individuals during leadership races. At present, because of the way the system is designed, people may contribute only once per leadership race. Under the proposed changes, those limits would apply on an annual basis.

These are probably the changes that will help the people who still have debts at present the most.

Again, as my colleague said earlier, Ms. Findlay, who took part in the Liberal leadership convention, has even said that under the new changes proposed by Bill C-21, she would be able to pay off her campaign debt in three days. That would in fact be surprising, given that it has been several years since those loans were taken out.

We believe it is important to make changes to this act, because everyone is calling for them. We know it is badly designed, it is badly formulated, and it generates a host of problems when it comes to political financing.

The Conservative Party can feign indignation at the Chief Electoral Officer if it likes and call for the act to be enforced, but everyone knows that at the end of the day, they are very happy to be able to torture the four guilty parties and use that back door to strip their old adversaries of all possible merit while they are down.

We believe it is very important for these changes to be made as quickly as possible and for the little political games to end. There is a lot of talk about that leadership convention in particular, because the debts incurred are still enormous. But still, they are not the only ones. We are talking about 80 candidates, 21 of them Conservatives, who still have debts they have not paid off because the law was too badly designed. The law regarding political loans really has to be changed.

There are several points in Bill C-21 that need to be examined. We in the NDP have decided to support the bill so it can be sent to committee, so we can look at each of those points properly, and so we can go ahead and make changes that are not just desirable, but absolutely necessary, because as it now stands, this act is not satisfactory. That is why I recommend that our party support this bill at second reading.

Political Loans Accountability Act
Government Orders

September 28th, 2012 / 10:30 a.m.
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NDP

François Choquette Drummond, QC

Mr. Speaker, I would like to thank my distinguished colleague for her excellent speech. I listened very closely to her speech and noted the current weakness that exists in the Canada Elections Act. We have been saying for quite some time now that good electoral legislation translates into a healthy democracy. And funding is the very basis of democracy. Basically, if some people have certain economic advantages, that can undermine a healthy democracy.

That is why I would like to ask my distinguished colleague for her views on the future of the Canada Elections Act. As she mentioned, this bill is merely a first step. Should we not have a complete overhaul of the Canada Elections Act, in order to ensure a strong, fair democracy?

Political Loans Accountability Act
Government Orders

September 28th, 2012 / 10:30 a.m.
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NDP

Alexandrine Latendresse Louis-Saint-Laurent, QC

Mr. Speaker, I thank my hon. colleague from Drummond for the question. He is a great MP who works very hard.

As for his question, he really seems to understand how important these changes are. It is absolutely crucial in our society to have electoral legislation that will ensure a healthy, vibrant democracy that people can believe in. I think changes really need to be made.

So far today, our discussion on the Canada Elections Act has focused primarily on political loans, but there are many other things that need to be looked at and changed in order to ensure a healthier and more vibrant democracy.

Political Loans Accountability Act
Government Orders

September 28th, 2012 / 10:30 a.m.
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Edmonton—Sherwood Park
Alberta

Conservative

Tim Uppal Minister of State (Democratic Reform)

Mr. Speaker, I appreciate the co-operation we have had to move the bill along to the committee stage where all parties will be able to work on it. This is a great step. I would ask if we could have the same type of co-operation on other bills. It would be very constructive.

Is the hon. member willing to offer the same co-operation on the Senate reform bill, Bill C-7? Let us at least move it from this place into committee. We could discuss the bill and work on it there. Could we have that commitment on other bills?

Political Loans Accountability Act
Government Orders

September 28th, 2012 / 10:30 a.m.
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NDP

Alexandrine Latendresse Louis-Saint-Laurent, QC

Mr. Speaker, I would like to thank the minister for the question. I will start by saying that the NDP's philosophy is to always work together. Our goal is to examine every bill introduced, and to say that we will work together to make the bill the best it can be. Unfortunately, this is sometimes not possible because the bills have fundamental flaws that prevent us from even studying them in committee. There are some things that we simply cannot get behind.

As for Senate reform, before seeking our approval, the Conservatives must secure the approval of their own caucus and their Senate caucus. It would perhaps be a good thing to do before trying to secure our approval.

The minister is probably aware that the proposed reforms are problematic for us. As things stand, he should perhaps look to his caucus before asking for our support.

Political Loans Accountability Act
Government Orders

September 28th, 2012 / 10:30 a.m.
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NDP

Pierre Nantel Longueuil—Pierre-Boucher, QC

Mr. Speaker, first of all I would like to congratulate all members present. It is wonderful to see this kind of agreement and this kind of constructive exchange, which we always strive for. I also appreciate my colleague's clarity with respect to the question from our colleague opposite.

Naturally, this is a step in the right direction. Does she think that more can be done to engage people who are less involved in these races and to obtain better representation of women, for example?

Political Loans Accountability Act
Government Orders

September 28th, 2012 / 10:30 a.m.
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NDP

Alexandrine Latendresse Louis-Saint-Laurent, QC

Mr. Speaker, I thank my colleague from Longueuil—Pierre-Boucher, who is an excellent colleague and excellent benchmate.

Indeed, several things could be done. Take, for example, the NDP leadership race that was held this year. We set a rather low limit to be able to run for leader, which meant that we had some very interesting candidates, such as our colleague from Manitoba and some of our younger colleagues, as well as more women and people who normally would never have been able to participate in such a race, in the manner in which politics is usually done.

Some slightly different rules meant that the candidates were much more varied. It is really important to put democracy and politics back in the hands of the people and not just in the hands of those who have money, who already have a lot of power and who buy more power with these loans and this money.

Political Loans Accountability Act
Government Orders

September 28th, 2012 / 10:35 a.m.
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NDP

Paulina Ayala Honoré-Mercier, QC

Mr. Speaker, I remember 2006. Back then, I was not yet a Canadian citizen. I had been in Canada for a few years, but I had not yet applied for citizenship. I was very attached to my Chilean citizenship. However, I was so shocked by the sponsorship scandal that I wondered how such things could happen here. So I became a citizen, and since I have always been involved in politics, I got involved again.

How does my colleague think this bill can be improved? What suggestions will the NDP be making to improve the bill and ensure that Canada and our democracy remain a model for other countries on this continent and for democracy in general?