Bill C-21 (Historical)

Political Loans Accountability Act

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

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.

Political Loans Accountability Act

[Stéphane Dion, Liberal, Saint-Laurent—Cartierville, QC]

Madam Speaker, as I said, we agree with a lot in this bill. I identified what we disagree with.

I have not received an answer from my NDP colleagues or my Conservative colleagues on what is the basic moral ground to give financial institutions more power than Canadian citizens.

We agree that the loans are transparent, that there are clear rules that the money must be paid back. We are open to an amendment stating that the loan must be at commercial interest rates. Why? Canadian citizens would not have the same rights as financial institutions.

That is the basic problem we have with this bill and it is at the core of the bill. If my NDP colleagues want to propose a limit, it must be the same for individuals and the financial institutions. Otherwise, I do not understand on which grounds they say that financial institutions are more acceptable in political life than Canadian citizens.

[Tom Lukiwski, Conservative, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Madam Speaker, I think we have had a meaningful debate this afternoon. I know that we will end up agreeing to disagree on a number of points.

I am completely supportive of Bill C-21 and the elements contained therein. In the limited time that I have, I want to point out a few of the reasons, but I also want to use my time to try and refute some of the arguments that I heard from members opposite as to why they seem to disagree. Perhaps I will start there, because we only have about 10 minutes left before the debate has to end.

I have heard from a couple of members opposite that they believe individuals should also have the right to lend money and that moneylending should not be restricted to financial institutions. The bill came into play because of the situation where wealthy individuals could lend money. We have seen many times in the past where supposed loans have been given to political candidates and were never repaid. That is simply unacceptable. The potential and probability for abuse under the current situation without Bill C-21 is extremely high.

The situation, quite frankly, is simply this. As it stands now, any individual could be in a position where he or she knowingly lent money to a political candidate with no expectations of repayment. It is quite conceivable that individuals could have consulted with a candidate and agreed upon a mechanism by which they could circumvent the rules, by lending a certain amount of money with very favourable interest rates, as low as 0%, and basically nudge, nudge, wink, wink, told a candidate not to worry about ever repaying it because it is a loan and the lender will end up writing it off or forgiving it. That is not a loan. That is a contribution. That is a donation.

As a government we need to step in to ensure that the potential for that abuse is completely eliminated. Bill C-21 would do exactly that. It would put provisions in place which would prevent anyone from trying to circumvent the rules again.

We have heard many times before, in committee and in debate this afternoon, some of the problems with the 2006 Liberal leadership campaign. Like my colleague from Hamilton Centre I will try to be as non-partisan as possible, but it was because of the abuse that we saw and still see as a result of unpaid loans from that leadership campaign that our government felt that some bill had to be introduced to prevent that type of situation from occurring again. Bill C-21 would do that.

I also want to point out that despite the protestations of members opposite, borrowing money from financial institutions does not empower those financial institutions. It does not give them a monopoly over political financing. It does not give them any untoward power to influence political parties or candidates. It is simply a commercial transaction that we as Canadians deal with on a daily basis. Whether Canadians secure a mortgage for the purchase of a house, whether they secure a loan to purchase a car or a heavy appliance and so on, they have been using financial institutions to secure loans for generations.

I do not believe that any financial institution, by lending money, whether it be $10,000, $20,000, $30,000 or $40,000 to a political candidate or a political party, would feel that it had some undue influence over that candidate because it entered into a commercial transaction. It is simply not true. In my view it is silly. This is a normal daily activity that most Canadians perform and have performed for the last 200 years, as long as there have been chartered banks in the world. We need to discount the argument completely that suggests financial institutions would have more influence over political candidates and therefore we should allow citizens to make loans.

What we are trying to achieve with Bill C-21 is to ensure that there is accountability and that there can be no circumvention of election financing rules by disguising contributions as political loans. The financial institutions would be obliged, as they are obliged in daily transactions with Canadians, to provide clear terms for both the rate of interest charged on the loan and for its repayment, something that we saw sorely lacking in the 2006 leadership campaign for the Liberal Party. Five years have gone by, and some of those loans still have not been repaid. That is not a loan, in my view, but a contribution, and it should not be allowed.

With Bill C-21 we would not only be putting in clear, transparent rules that would make candidates and political parties accountable; we would also be giving confidence to the Canadian electorate that there will be no funny business or circumvention of rules, and that everything will be done in a transparent, accountable manner acceptable to Canadians.

One of the consequences of Bill C-21 is that if there are unpaid loans, the political parties themselves, whether as riding associations or federal parties, would be responsible for backstopping those loans and repaying the money. We have yet to see any activity by the Liberal Party of Canada in this regard. Has the Liberal Party of Canada stepped up to the plate and said it has a number of unpaid loans from some of its former leadership candidates back in 2006, that it does not think such a situation is acceptable, that it is going to repay them right now and then make its own arrangements with those leadership candidates to reimburse the party? I have seen no evidence and heard no discussion to that effect in this debate.

Members opposite in the Liberal Party have stood in this place this afternoon and said that they want accountability and transparency, but they believe that they can still play fast and loose with the rules. Where is the accountability when the once great Liberal Party that governed this country for many decades now does not even want to speak about repaying loans that some of its leadership candidates incurred?

We are not talking about candidates from a local riding association who might have been defeated in an election; these individuals tried to become leader of the Liberal Party of Canada and the next prime minister of Canada, yet that party refuses to be accountable for the debts incurred by its candidates. Instead Liberal members stand here this afternoon and criticize our government for this bill, which is trying to bring accountability and transparency to the political process.

I do not care what arguments they bring forward at committee. I will be there to ensure that I have a question for them: as a party, what do they plan to do about the unpaid loans? What happens if another five years go by? Will they still be advancing the same arguments as they have this afternoon? It is totally unacceptable.

Had we not seen the rampant abuse by the Liberals, we might not have seen the need for Bill C-21. Nonetheless, it is before us. It is a worthy bill, and one that deserves support from other parties.

I understand and appreciate the comments made by my colleague from Hamilton Centre that he wants to discuss this at committee. I would certainly be more than willing to entertain suggestions. I will certainly not commit that I would accept any of his suggestions; I have heard some of the arguments, I understand what he is going to be advancing at committee, and I think that is worthy of debate, but on its own merits Bill C-21, as it stands, deserves the support of all members in this place.

I know it has the support of all Canadians.

[The Deputy Speaker, NDP, Denise Savoie]

The hon. member will have about nine minutes when the bill returns to the order paper.

It being 5:30 p.m., the House will now proceed to the consideration of private members' business as listed on today's order paper.

The House resumed from December 8, 2011 consideration of the motion that Bill C-21, An Act to amend the Canada Elections Act (accountability with respect to political loans), be read the second time and referred to a committee.

[Tom Lukiwski, Conservative, 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.

[Libby Davies, NDP, 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?

[Tom Lukiwski, Conservative, 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.

[Alexandrine Latendresse, NDP, 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?

[Tom Lukiwski, Conservative, 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.

[Tim Uppal, Conservative, 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?

[Tom Lukiwski, Conservative, 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.

[Alexandrine Latendresse, NDP, 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.

[François Choquette, NDP, 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?

[Alexandrine Latendresse, NDP, 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.

[Tim Uppal, Conservative, 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?