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

[Tim Uppal, Conservative, Minister of State (Democratic Reform)]

moved 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.

Mr. Speaker, I am pleased to have this opportunity to continue with our democratic reform week and begin the debate on Bill C-21, the political loans accountability act. The bill is another one of our government's long-standing commitments and I am happy we are moving forward on it today.

As we have shown with previous bills, our government is pursuing a principled agenda to strengthen accountability and democracy in Canada. In this case, we are addressing the rules respecting loans to political entities.

Currently, there are no limits on loans that corporations, unions, or wealthy individuals can grant to political entities. It is unacceptable that the political loans regime does not meet the same standards of transparency, accountability and integrity expected of the average Canadian. Hard-working ordinary Canadians are expected to pay back loans under strict rules, whether it is for starting a business, going to school, or purchasing a home, and the same rigorous standards should also apply to politicians.

As it stands, there is a loophole in political financing legislation. We are addressing the loophole with this bill.

Our government, in its first bill in 2006, established strong standards for political contributions in the Federal Accountability Act. The act eliminated contributions by corporations and unions. It changed the rules to ensure that politicians would not be beholden to those with deep pockets and unions or corporations that give too much money. However, our law still allows those with deep pockets to lend too much money. The rules concerning political loans should be consistent with the rules for political contributions.

One major issue regarding the treatment of loans in the Canada Elections Act is the loophole in the current standards that fails to impose restrictions on the source and the amount of political loans in a way that is consistent with the rest of the rules for political financing.

A second important issue that our government seeks to address is the inconsistency in transparency requirements for political loans. As it stands, the inconsistencies on how political loans are treated unduly complicate the enforcement of the Canada Elections Act and do not provide for consistent transparency across the Canadian political finance regime.

This lack of rules may result in loans being used as de facto contributions. Clearly, it is a situation where politicians could be beholden to those who lend them large sums of money instead of being beholden to those who brought them into office with votes. This is unacceptable.

By limiting the amount of a loan a candidate or another individual can make to fund political activities, the political loans accountability act would increase integrity in the political loans process by ensuring that all candidates are on a level playing field, regardless of their personal wealth or their connections with elite interests.

The bill would also ensure that members of Parliament are accountable to their constituents first by removing the opportunity for undue influence by unions and corporations on elected representatives.

However, the bill would also ensure that parties, associations and candidates will continue to be able to secure sufficient financing for their electoral campaigns. Political entities will be able to borrow money from a wide range of financial institutions, including trust and loan companies, credit unions and insurers.

The bill is consistent with a recommendation from the Chief Electoral Officer of Canada. It reflects a legal approach to political loans already in place in several provinces, including Ontario, Quebec, Manitoba, Alberta, and Newfoundland and Labrador.

To fully highlight the practical benefit of our proposed measures, I would like to discuss some of them in more detail.

The Federal Accountability Act established fixed contribution limits for individuals and completely eliminated contributions from corporations, unions and associations.

Following the passage of our flagship Federal Accountability Act, the Standing Committee on Procedure and House Affairs asked the former chief electoral officer to prepare a report on political financing issues with recommendations respecting the use of loans.

The Chief Electoral Officer's report was submitted in January 2007 with respect to the existing rules on political loans. He acknowledged that:

While Parliament has imposed an extensive regime to control the source and extent of contributions, it has not done so with respect to that other source of funding constituted by loans.

The Chief Electoral Officer suggested that loans to political entities by lenders that were not in the business of lending ought to be restricted, because such loans granted at non-commercial rates at terms and conditions that were available to the general public and without expectation of repayment may lead to the perception of abuse and undue influence by those with the financial means to grant these loans.

To prevent such abuse or unfair influence by those wealthy entities with the ability to make large loans or any perception of it, the Chief Electoral Officer made the following recommendations: that the limit on loans be made by individuals should be to their contribution limit; that political entities may borrow money in excess of the contribution limit only from financial institutions; that all loans by financial institutions be at commercial rates of interest; and that a separate regime for the treatment and reporting of loans be established in the act.

In response to these recommendations, our government introduced the political loans accountability act, which had it been adopted would have regulated the use of loans by political entities to ensure full disclosure and greater accountability in the financing of political campaigns.

This legislation was passed by the House of Commons as Bill C-29 in 2008 and was awaiting second reading in the Senate when Parliament was dissolved for the 2008 election.

The legislation we are discussing today is substantively the same legislation as passed by the House in 2008 as Bill C-29. Our government worked collaboratively with opposition members to pass Bill C-29, which was awaiting second reading in the Senate when Parliament was dissolved.

Some changes have been incorporated from its original version. For example, the bill now would exclude from the annual contribution limit any portion of a loan that was repaid to the lender and any unused loan guarantees, as proposed by our government during the committee's study period.

It would require the Chief Electoral Officer to hear representations from affected interests before making a determination about a deemed contribution, as proposed by the opposition.

It would establish contribution limits for leadership contestants on a per calendar year basis rather than a per contest basis.

These amendments demonstrate that our government developed the political loans accountability act in a collaborative spirit with opposition parties throughout the process. Indeed, when the political loans accountability act was introduced, with the amendments above during the last Parliament, in 2010, there was widespread support in the House, including among the NDP, for the updated bill.

We think these incorporated changes make the bill even better. The act we are discussing today is the reintroduction of this updated legislation from the last Parliament.

Here are some of the important changes brought by our bill to Canada's political financing regime.

The bill would establish a uniform and transparent reporting regime for all loans to political parties, associations and candidates, including the mandatory disclosure of terms, such as interest rates and the identity of lenders and loan guarantors.

Unions and corporations would be banned from making loans to political parties, associations, candidates and contestants, consistent with their inability to make contributions as set out in the Federal Accountability Act.

Total loans, loan guarantees and contributions by individuals cannot exceed the annual contribution limit for individuals established under the Federal Accountability Act, which is currently $1,100 in 2011. Only financial institutions and other political entities can make loans beyond that amount. Loans from financial institutions must be at fair market rates of interest.

Rules for the treatment of unpaid loans will be tightened to ensure candidates cannot walk away from outstanding loans. Riding associations or parties will be held responsible for unpaid loans taken out by their candidates.

By prohibiting loans from unions and corporations and requiring that loans from financial institutions be granted at a market rate of interest, this bill would prevent corporations and unions from doing indirectly, through loans, what they are now prohibited from doing directly through contributions.

Together with the Federal Accountability Act, this measure will no doubt yield more fairness for electors. Politicians will now have to seek financial support from voters, not corporate entities or special interest groups. Politicians will be entirely accountable to voters as opposed to corporations or union interests.

Requiring a fair market rate of interest will allow all parties and candidates to be on an equal playing field by no longer allowing situations whereby favourable or entirely unknown terms of loans are granted without transparency. This change will also serve parliamentarians, riding associations and parties by protecting them from perceptions that they might be indebted to unions or corporate interests.

In addition, our government believes it is unfair that a candidate can walk away from his or her campaign debts. Everyday Canadians are expected to pay back their loans under strict rules, and the same should apply to politicians. This is why our bill proposes to transfer a candidate's unpaid loans to riding associations. This will ensure that the money borrow will be repaid.

Another important impact of the proposed bill will be to subject loans made by individuals to their contribution limits. This measure will prevent the current ability to bypass a contribution limit by lending large amounts of money without any expectation of ever being reimbursed. This measure will ensure greater accountability to citizens and enhanced transparency and integrity in our political financing regime.

The last, but not least of these changes that I want to discuss today is the increased transparency requirements for loans to all political entities. From now on, all loans will need to be recorded in writing and reported to Elections Canada. This change will increase transparency, especially in the case of candidates and nomination contestants who currently have only limited disclosure requirements. Putting in place effective transparency standards for candidates and nomination contestants will allow Canadians to know who is financing their campaigns and under what terms. I think these measures will find wide support in the House of Commons and among Canadians.

I would like to emphasize how the bill, in conjunction with the Federal Accountability Act, democratizes the political financing regime by focusing on grassroots voters. Wealthy individuals will be unable to bankroll their own campaigns by making large loans to themselves. Candidates will be unable to rely on a small number of wealthy contributors to finance their campaigns. They will instead need to seek support from those they wish to represent in the House of Commons.

Lending will not be limited to banks. Indeed, there will be a wide range of financial institutions still able to provide loans. What the bill does is preserve the important role for small community lenders and financing grassroots political campaigns, such as families, friends, supporters, credit unions and caisse populaires. By making political parties and candidates dependent on their supporters for financial support, parties and candidates now have a greater incentive to be responsive to the average Canadian.

What I hear from my constituents, and indeed many more Canadians across the country, is that they do not want to see parties and candidates using large loans from wealthy individuals, corporations, or unions to finance their campaigns. Large individual contributions are not permitted, so large individual loans should also not be permitted. Corporations and unions are not permitted to donate to federal political entities, so corporations and unions should be unable to loan large sums of money to political entities.

When our government was elected in 2006, we made the Federal Accountability Act our first priority, which among other things tightened the contribution limits to ensure corporate and union interests and wealthy individuals would not unduly influence politics.

With the introduction of the political loans accountability act, we are building on our flagship Federal Accountability Act by bringing greater transparency and integrity to political loans. The bill would strengthen Canada's political finance regime, already one of the strongest political finance regimes in the world. This is good news for Canadians and for the political process.

I encourage all parliamentarians to vote in favour of the bill.

[David Christopherson, NDP, Hamilton Centre, ON]

Madam Speaker, for the most part, the official opposition is generally supportive of the general direction of this legislation. It is our intent at this point, unless we have reason to change our opinion, to support the bill at second reading and send it to committee. It is at committee where I would like to pose my question.

I do not know whether the minister knows or not from talking to his predecessor, but discussions were held in the last minority Parliament when the government was looking for our support to carry this legislation. One of the areas that was a problem in that draft legislation, and it remains a problem in the bill, was the treatment of loans for riding associations once they had a candidate, and I will use myself as an example.

Mine is not a rich riding in terms of demographics. We always have to borrow money through a line of credit and it always takes us the whole term to pay it back. We seem to pay it off just in time to get another line of credit for the next campaign. That is just the nature of my riding, because it is made up of mostly working people who do not have a lot of money to contribute to politicians. They contribute what they can but it is not a lot.

If I am interpreting Bill C-21 correctly, we will be in a situation where to get a $20,000 line of credit, after a candidate has been chosen and the election is either about to be called or has been called, it will take 18 to 20 people at a contribution of $1,100 each, because that is the maximum, to back it up. Given that it is a political loan, banks often want dollar for dollar collateral. Using the round number of 20 people, that is a lot in terms of contributions. That money is then tied up for the campaign and cannot be contributed.

Is the minister willing to roll up his sleeves and look at making some changes in this area?

[Tim Uppal, Conservative, Edmonton—Sherwood Park, AB]

Madam Speaker, I thank the member for his support of the general principle of the legislation because it is important that we pass the bill and get it to committee. I would be happy to appear in front of committee to discuss the bill at that time as well.

In regard to his specific question, it is important that we limit the amount of the guarantee that can be given to a loan to the same amount as a contribution limit. The contribution limit in 2011 is $1,100. Anything more than that, especially if it is not paid back, would be deemed to be a larger contribution, essentially a de facto contribution. This is an important principle of the bill. I would be happy to discuss it further, but it is important that we limit it to the amount that anybody is able to make.

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

Madam Speaker, I hope the minister will be as precise in answering questions as he was in his speech.

I have two questions for the minister. What criteria will financial institutions use to decide if it will lend money or not? Is the minister saying that it is more moral for legitimate financial institutions to give a loan than it is for a citizen?

[Tim Uppal, Conservative, Edmonton—Sherwood Park, AB]

Madam Speaker, it is up to the banks to make that decision on how they will make the loan or if they will make that loan. We as a government cannot tell a bank what criteria to look at when it makes a loan to many different types of candidates. It could be a nomination contestant. It could be a contestant in an election who has already been nominated by the party. It could be a leadership contestant, possibly the front-runner or possibly a person who has no chance of winning at all in the minds of the bank. This decision needs to be made by the individual bank.

It is not just banks. It is also insurers and credit unions. A number of official institutions would make those loans as long as they were open and transparent about the terms and conditions and who the guarantors would be for that loan. One's family, friends and other individuals can guarantee the loan to the maximum contribution limit.

The bill is about bringing more accountability and transparency to the entire political financing regime.

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

Madam Speaker, just a comment on the whole question of the ability and the availability of candidates and their EDAs to get loans from financial institutions.

I have been in the same situation in my early political life as my colleague, my friend from Hamilton Centre was, inasmuch as we did not have a lot of money in my EDA. We found it very difficult to raise money, in the early days. However, I found quite quickly that banks and other financial institutions, quite frankly, feel a responsibility to help the democratic process.

That has also been bolstered by the fact that they know that 60% of a candidate's return could be assigned to the banks. In other words, as a candidate, if I received over 10% of the votes cast in my riding, I would receive 60% of my eligible expenses. That just usually is assigned to financial institutions, which gives them quite a bit more confidence that the money can be repaid.

I ask my colleague, the Minister of State Democratic Reform, does he believe, because of the current situation on reimbursements to political parties and candidates, this would be an asset to candidates seeking loans from financial institutions?

[Tim Uppal, Conservative, Edmonton—Sherwood Park, AB]

Madam Speaker, I thank the parliamentary secretary for his question and insight into this issue.

Absolutely, the return for candidates who receive that level of voting, 60%, is some insurance to banks. However, at the end of the day, political parties can loan money to an electoral riding association or other EDAs can also loan money to another riding association. So, between political entities, loans can be made.

There is ample opportunity for Canadians to be a part of the political process where financing will not hinder them.

This bill would actually level the playing field and bring everybody down to the same level where corporations, big unions and wealthy individuals do not control the agenda. It is Canadians who have an opportunity to become part of the political process.

[Ted Hsu, Liberal, Kingston and the Islands, ON]

Mr. Speaker, it seems to me that the minister has just told us that he is going to give a lot of power to the financial institutions, varied as they are, to decide whether the campaign of somebody who is just starting out is viable or not. Let us say it is a $20,000 loan and a candidate has lined up 20 people, each guaranteeing $1,000. Even in that case, the financial institution is going to have to do a lot of paperwork. It is going to eat up any profit that the financial institution is going to make.

So, does the financial institution provide that loan or not? Maybe it wants to be nice to a candidate and will eat the clerical costs that would wipe out the profit of that loan. Frankly, it is clear to me that in these cases, the banks are given power to write off some expenses and make some candidates' campaigns financially viable right at the early, critical stages and to not support other candidates.

Do members know the kinds of candidates who will not be supported? Female candidates, I think, would be hurt by this kind of legislation, and it would hand power and discretion over to financial institutions.

[Tim Uppal, Conservative, Edmonton—Sherwood Park, AB]

Madam Speaker, the fact is that we as the government made a commitment to Canadians that we would close a loophole in our political financing regime. We were the government that brought in the Federal Accountability Act that cleaned up the political financing regime in Canada. Now we are building upon that by closing this loophole.

The fact is that it is not only banks but also insurance companies, credit unions and other institutions that can provide these loans. Also, these loans can be provided by another electoral district association, by the party, or by family and friends.

This bill would actually level the playing field for all Canadians to get involved in politics. It would take the power away from wealthy individuals, corporations and unions.

[David Christopherson, NDP, Hamilton Centre, ON]

Madam Speaker, I appreciate the opportunity to enter the debate. Let me first of all say that the reason why we are supportive of this is because there is a problem. We see the problem and I am not going to make this any more partisan than it sounds, that is not my intent, but merely the reality.

The leadership race that the Liberal Party had left huge debts. It would seem that some of those debts are not going to be paid off. If that is the result and a candidate was backed by individuals, effectively right now those individuals bankrolled a big part of the candidate's campaign and by virtue of just never paying it off, put that money forward, and did exactly what we are trying to avoid which is single individuals, single corporations, and single unions from providing tens, possibly hundreds of thousands of dollars to one candidate.

I agree with the minister in acknowledging that there is a problem. We accept that the minister is going in the right direction. That is why again, as always, we say we need to see the details at committee. We do have some concerns. It has been raised once and it will be raised again by both opposition parties. The minister is saying that there is no need to put any regime around banks or credit unions in terms of who they will loan to and who they will not. That could create a serious problem. If we are only allowing the money to come from one or two places, and those places are not democratized in terms of what the rules are, in terms of who they will lend money to, one does not have to be a political scientist to see the problem.

I would hope there would be some room and latitude to talk at committee about what kind of regime might be in place, what kind of safeguards could be in place, and maybe there is a backup by the government, maybe there is a role there. But any possibility where we are narrowing how Canadian citizens can raise money to participate in our electoral process, we need to ensure that not only is it fair but that we can actually access the money regardless of our political platform.

For the most part the platforms here are not scary. Some might argue the point from our different perspectives. But in a world view, I think members know what I am saying when I use that phrase.

If there is a legitimate, legal party that might have policies that scare certain segments of the population and part of that segment of the population could be the banks. It does not take a whole lot of analysis to realize that if a bank can find a way to legally, legitimately and free from harm say “no”, it is probably in the bank's interest to ensure that a party that has a platform that would hurt the bank would be helped by that bank to get more votes, and ultimately become the government that is then going to bring in rules and a regime that the bank thinks is not in its interest.

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

I applaud.

[David Christopherson, NDP, Hamilton Centre, ON]

I am thrilled that the member is applauding. Really, it just warms my heart.

We want to have a look at that. We think that is a valid point. There may be other points coming from the third party since it is the example we are using of why we need to have a loophole. That needs to be taken into account, but again, regardless of how many times he heckles me these days, I have the greatest respect for the democratic reform critic for the Liberal Party. I believe that when we get to committee and if the minister if open-minded, we can start to do something about this.

However, I say to the minister, leaving some potential political parties vulnerable to not being able to access enough capital to mount a campaign is as undemocratic as allowing people with tens of millions of dollars to bankroll their good buddy. We need to be talking about that.

There is another real problem and I am going to come back to it again. I heard the minister's response when I asked if the Conservatives wanted to make it fair and keep it on a level playing field, but, quite frankly, how fair is it in a riding like mine where there are not as many wealthy people? I know the difference. When I was an MPP, my boundary ridings changed for a while and my riding encapsulated a part of the city where the demographic income was much higher. Boy, did it make a difference. Now I am back to my old boundaries and the standard problem. I would not raise it as a complaint other than it is in the context of this debate.

Is it really fair for an individual candidate? For instance, I did this in the last campaign, and again I will use myself as an example so nobody will think I am playing any games. I bankrolled my campaign with my line of credit and my house. That was not an institution or an individual, that was me as the candidate putting up my house as collateral, whereas this bill would have me go out and line up 20 or 30 people, each one having to put out $1,100 and my riding association would be denied that $1,100 because it is tied up backing up the loan.

Our point at committee is going to be whether there is some way that individual candidates can back up their loans, as I did. Then, after the election, my books were cleared up and the loan was transferred over to the riding association, but still backed up by my home. We may have to talk about what would happen in the case where a candidate does not win the seat and may move away, but those are still issues dealt with in any kind of collateral arrangement with a financial institution. They should not be so overwhelming that we cannot get over it.

I am kind of arguing the opposite of where I am coming from, which is to stop money from having an influence, but is the democratic process really harmed in terms of the financing of elections by virtue of me backing up a $20,000 or $30,000 line of credit with my own home? Not everybody has a home. Granted, it still has problems, nothing is perfect. The circumstances may be different, but could a close relative do that? Is there a way that we can do this, so that it does not create an unfair disadvantage to those of us who do not have wealthy demographic ridings?

This law does not matter much if someone has $100,000 in the bank. I believe there are some Conservatives and Liberals that do. I would be shocked if any of my colleagues did. They may, I am not aware of it, but I do not think it is that unusual on that side of the House or for some of the Liberals to have that kind of money, and so it is not a problem. I bring that as an element of fairness for us to look at, to see whether we can come up with a regime that meets the standards that the minister has set out but still allows fairness for individuals running for office.

My last point on this is that it may sound like $1,000 from 20 or 30 people is not a big deal. However, this is real world stuff. Does anyone know how difficult it is to find 20 or 30 people who have that kind of money to spare? Again, it may not sound like a lot to members in this place, but for many of my constituents, that could be all of their savings. Then a candidate has to co-ordinate the timing. Those 30 people have to go in and sign the documents before the candidate gets the money, which means time is lost, time when the campaign is going on. The candidate's opponents are already up and running and the candidate is still running around trying to get signatures 26, 27, 28, 29 and 30, so he or she can get a line of credit and get his or her campaign up and running.

Moving from a situation where I back up the loan with my home, and that is the way I have done it since I got here, versus the other way really is a huge disadvantage for some of us. I am hoping that we will be able to take the time to look at that.

I know my time for debate will expire, as it goes quickly. I do want to get my dibs in on the discussion about electoral reform. The minister used some very lofty language in his news release:

The current rules on political loans do not meet the high standards of accountability, integrity and transparency that Canadians expect in their political process.

That is all well and fine, but one of the most progressive steps, and government members should get ready to howl, that was ever taken in this place toward making elections fairer was providing the per-vote subsidy.

[Some hon. members]

Oh, oh!

[David Christopherson, NDP, Hamilton Centre, ON]

I told you, Madam Speaker. They are a little slow off the mark. They should have been quicker on that one.

I want to say to the hon. members across the way that I participated in an election observation mission in Morocco in the last few weeks. What is one of the most important things to the people of Morocco? It is a struggling, emerging democracy in northwest Africa. One of the most important components they felt they needed was subsidies for political parties from the public purse to level the playing field.

When the government talks about a level playing field, it is often like we all have the right to live under the bridge, that old example. When we stand back and look at the macro picture, at the end of the day, money will play a bigger role in Canadian politics after the government than it did before. That is wrong.

I have given, at every opportunity, former Prime Minister Jean Chrétien as much credit as possible. I think the president of his own party used the expression, that was about as dumb as a bag of hammers. Why? Because the Liberals used to get all their funding from corporations. That was to be set aside, in large part, and replaced with the subsidies.

That was a good thing to do. It did make our democracy better. I have had the chance to participate in six or seven election observation missions. Anyone who is involved in elections around the world either has that component, or the one thing they desperately want is to get private money out of their political system and replace it with public funding. They are either doing this because they know it is important, or they want to because they know the damage and corrosiveness that money can play in a democratic system like ours.

My next comment will be on the same quote, when the minister used the word “accountability”. I love this. When the Conservatives say that word a lot, I want to bring into the broader discussion, to put the context of Bill C-21 in a more enlightened form, that under their new elect-the-senator bill, there is no accountability.

In fact, the senators would be prohibited by law from being accountable because they would run on a platform of promises, as we all do. They would serve nine years, which we do not. If we look at the model all of us here live by, if we want to stay in office beyond our term, we go back to the people and say, “Here are the promises I made. Here is what I did, what I said, how I voted. Now I ask you, my boss, how did I do, and do I deserve to get rehired or re-elected for another term, yes or no?”

However, elected senators, and I use that term loosely, would be prohibited by law from running again after nine years. Where is the accountability? There would be no accountability at the beginning, only promises. There would be no accountability in the middle. They would not even have constituency offices so they would not even be meeting Canadians, never mind being accountable. At the point when they should go back at the end of their terms, they would be prohibited by law from running again. Where is the accountability?

The minister also said in that same quote, “integrity”. That is pretty rich, coming from the party that gives us the current Minister of National Defence.

The last point is on the Conservatives' use of “transparency”. We do not need to look any further than today's question period and the Canada-U.S. border plan. We do not even know what is in the plan. It may be taking away massive amounts of Canadians' rights.

I raise all of that because the minister sets all these standards and uses these lofty words in his news releases. When we start to analyze piece by piece what the government is doing, it is undemocratic reform on a whole host of files. The words “accountability, integrity and transparency” are the last ones that Canadians are thinking of when they look at the actions and the agenda of the Conservative government.

I will end there. We are in support of closing the loophole. However, we think that there is some improvement needed to make our system stronger.

We have some serious concerns about having banks and other financial institutions as the only ones that can provide capital, with no requirement to actually provide it to all parties no matter what the circumstances. That is a huge problem, but it is solvable. I believe, if we wanted to, we could find ways to bring in conditions that would be acceptable to everyone concerned and make that aspect even fairer.

We hope that we can do something about the requirements for 20 or 30 people to get that initial line of credit. Here is one idea. One could be allowed to spend up to a certain percentage of the maximum. If one's limit were $100,000, one might be allowed to borrow up to $40,000 or $50,000 on the signature or collateral of the candidate.

I am sure we could find a regime that would still meet the goals of the government to level the playing field in terms of money, but also to make sure that our election laws apply equally across the country. The laws should not give an advantage or disadvantage to one's opponents in a general election or byelection.

If these concerns are not resolved, then there is no guarantee what position we will take at third reading. However, with those caveats, we are prepared to support the bill going to committee.

I hope the minister will allow us the same flexibility and tone that we had when we reviewed the previous bill, which we are voting against. The process at that committee was certainly as fair as I could have hoped for. At no time did I feel that the government was using a hammer to shut down democracy. I hope that we can look forward to the same relationship at committee on this bill. I hope we can make the improvements we need as well as look at other improvements to make it even better.

I always say that on bills like this, the ideal would be if we could all be standing in support of it. Would that not say a lot about a good piece of election law?

That is our goal; that is our position. We will see what happens.

[Tim Uppal, Conservative, Minister of State (Democratic Reform)]

Madam Speaker, it has been good to work with the hon. member. We will have good discussions on this bill.

The member raised the point about how some people have a house that they could possibly get collateral on, but others may not. He then said maybe a relative could provide a loan. Where does it stop? Where would those guidelines be?

The fact is, we are trying to stop wealthy individuals who have the ability to provide a loan but then have no real expectation of repayment.

For some established political parties, there is a possibility that the individuals could get 60% back on their cost. However, there are other political parties which do not have a chance of getting anywhere in an election. What if one of those candidates were to borrow money under the member's plan and then just walk away from the loan? Where does it stop?

At the end of the day, we need to have rules and guidelines. The bill that we presented has accountability and it is transparent. It says that the maximum one could borrow is the amount one could contribute. Anything over that would be considered a contribution.

I ask the member, how would he solve that issue?

[David Christopherson, NDP, Hamilton Centre, ON]

Madam Speaker, I thank the minister for staying, listening to my remarks and asking a question.

I am disappointed to hear that answer. What I heard was a defence of the bill. That is not the attitude we are looking for.

I was doing, for a moment, the kind of work that we do at the committee where we deal with these laws. I see my colleague has been working on a couple of the pieces of legislation and projects now for two or more years.

I enjoy working with the hon. member. He is very tough, but he is very fair. He is an hon. member and a good parliamentarian. However, when I give an answer like I did on the floor just now, I expect a response that says, “Well, I hear you on that. Is there a way we could tie it all in?” I may not have a perfect answer right now, but if I had all the perfect answers, I would not be here. I would be somewhere else.

Collectively, we can tie it all in. I am just disappointed the minister was being so dismissive. If the smart minds who want to work together rather than score political points on each other would turn their minds to that, we could find a way to solve our problem.

I hope the minister does not become so entrenched with, “It is my bill. It has to be my way or no way.” That does not get us anywhere. I really think there is an opportunity here, in talking about election laws, to come up with rules that are fair for everyone.

I was trying to suggest to the minister how we could approach that. I was disappointed in his response. I hope he will get back on his feet and indicate that that is not how he sees any kind of potential dialogue going on. I hope he will be a little more open-minded.

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

Madam Speaker, I want to tell my colleague that I agree with 95% of what he said.

I am puzzled by his conclusion, when he said that he has caveats with the bill. In fact, he is strongly questioning the core of the bill. For instance, he said that we should not give the financial institutions this kind of extraordinary power to pressure politicians and parties, but that is exactly the purpose of the bill.

The bill stipulates that citizens will not be allowed to give any loans, but financial institutions will. Why does he want to give this monopoly of power to financial institutions, big money in some ways, and ask them to have a political role they do not want?

Is it because the NDP is no longer socialist but social democrat? I expect the NDP will vote against this bill.

[David Christopherson, NDP, Hamilton Centre, ON]

Madam Speaker, the first thing I would say is that if my colleague wants to have that much influence on the NDP caucus, we could find him a seat here. Then he would be welcome to attend meetings.

I do appreciate and respect that the hon. member has said he supports 95% of what I said. That is a good start. However, if the member wants to ratchet things up a little, I am game for that.

The fact of the matter is we do need change. The Liberals are more interested in leaving things the way they are because that has worked so well for them over the years. They have lots of rich friends who can bankroll their buddies. The reason we even have this bill in the first place is that in their leadership campaign, there is an issue of hundreds of thousands of dollars that have not been paid back. We in the NDP do not accept that.

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

Madam Speaker, it is always a pleasure to listen to comments from my colleague from Hamilton Centre.

I have to reciprocate. Not that this was supposed to turn into a lovefest here, but I do appreciate the work that the member for Hamilton Centre has produced at committee. In discussions, we are not always on the same page. We end up, from time to time, agreeing to disagree. I do believe that the member has the best interests of this bill at heart when he says that he believes there should be some changes.

I do not think I am going to end up agreeing with him on some of those points, but I do want to make a comment and ask the member to comment on one of the points he made that did not directly deal with Bill C-21.

The member talked about the need for public subsidies, public financing of political parties. I believe that we do not need that. We have so many other avenues through which the public can receive benefit. For example, as we all know, anyone who contributes $400 gets a 75% tax credit. There are also rebates to political parties and candidates.

I believe one of the fundamental aspects of democracy is, if people are running for political office, they should find support from like-minded people who wish to provide financing because they believe in the candidates and the democratic process.

I would ask my colleague to comment on that, please.

[David Christopherson, NDP, Hamilton Centre, ON]

Madam Speaker, I would answer the member this way. If the government was all that concerned about not wanting tax subsidies to go in, why did it not go after the other tax credit part? Why did it not go all the purist way? Why? Because if we look at the numbers, I believe, and I stand to be corrected, it got more money back from that than it did from the subsidies and what it got back was more than all of our subsidies combined.

Conservatives want to have subsidies as long as they works for them. What they do not want to do is leave subsidies in place that help all democratic parties. They do not want to be that democratic.

[Philip Toone, NDP, Gaspésie—Îles-de-la-Madeleine, QC]

Madam Speaker, I would like to thank the hon. member for his presentation. I thought it was very interesting.

The bill is interesting even though it has some shortcomings. Today, it seems that the government is focusing on opening the door to major corporations so that they can have a rather considerable weight in the democratic process.

Clearly, we have to change the way representation can be done in our country. I am intrigued by what my colleague said in his presentation. He said that we should give some serious thought to the demographic issues raised in the bill. For example, women in Canada are disadvantaged if we compare their situation to that of men. Could he expand on how we could improve the participation of women and change this bill to make more room for women?

[David Christopherson, NDP, Hamilton Centre, ON]

Madam Speaker, my macro answer is this. Bring in proportional representation and we could correct a whole lot of problems that exist in our democracy right now. That is the cornerstone of where we ultimately think we need to go.

We know the other two parties do not agree, but proportional representation would do more to advance the interests of true democracy, to have every vote really matter, to have the voices and opinions that exist in our country reflected in the House, to have more women, more aboriginal members, more minority groups, more disabled groups. There are all kinds of people who are either not represented here or not represented sufficiently. Proportional representation is the answer to that.

I suspect this bill will not take us far enough to do that, which is why whatever we do to the bill, it has to be in the context of recognizing proportional representation and getting rid of the other place. These are the kinds of things that will bring real democratic reform to Canada and to the House of Commons. Those are the things that we will push when we get over there.

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

Madam Speaker, although the Liberal opposition agrees with a number of the aspects of Bill C-21—I am going to repeat my sentence from the beginning because the minister was not listening.

Although the Liberal opposition agrees with a number of the aspects of Bill C-21 to amend the Canada Elections Act in terms of accountability with respect to political loans, we cannot support the bill in its present form because it contains a major defect. It gives financial institutions exclusive political authority that they should not have, that they do not want, and that will have the effect of discriminating against a large number of people, especially women. I first want to highlight the aspects we support, then the ones we do not support, before I propose a constructive amendment.

We support any legislative measure that seeks to ban the hidden power of money in politics. We also support any legislative measure that provides greater fairness and greater transparency in making loans for political purposes.

The Liberal Party strongly supports efforts to increase fairness, transparency and accountability in the electoral process. After all, we are the party that initially passed legislation limiting the role of corporations and unions in electoral financing and lowered contribution limits.

No loans should be made in secret and Canadians should not be kept in the dark. This is why under current legislation the details of all loans, including amounts and names of lenders and guarantors, must already be disclosed publicly.

We agree that all loans to political entities, including mandatory disclosure of terms and the identity of all lenders and loan guarantors, must be uniform and transparent. These rules should encompass loans, guarantees and suretyships with respect to registered parties, registered associations, candidates, leadership contestants and nomination contestants.

Thus we agree that financial reporting should be as transparent as possible, which is why we support clauses 5, 11, 25 and 32, which require disclosure of information regarding loan amounts, interest rates, lenders and dates of repayment.

However, we also favour transparent rules that guarantee the right and ability of all Canadians to run for office. It is a fundamental principle of democracy that all Canadians of voting age must have the opportunity to run for office.

In consequence, financial institutions should not be put in the position to decide who can run for office. Yet the bill would give financial institutions too much power to decide who would receive political loans, a power that would expose them to accusations of politicization and discrimination, real or perceived. Making banks the sole lending authority under clause 7 could potentially limit participation in federal politics to only those who would be able to gain credit from a financial institution, as defined under the Bank Act.

It would be a serious mistake to limit to financial institutions alone the ability to make loans beyond the annual contribution limit for individuals.

It would be a mistake to enable these companies to play a political role in deciding who would receive loans and the ability to marginalize certain applicants who did not fit particular criteria, or to discriminate against them.

Bill C-21 gives financial institutions a monopoly on decision-making that is completely contrary to the democratic values and principles of Canadians who do not want access to public services to be linked to a prospective candidate's financial status.

There is a fundamental difference between asking for donations or loans from people by appealing to their sympathy for the ideas or the qualities of a prospective candidate and lining up at a counter in a bank where strictly commercial lending policies are applied. You do not buy your way into a life of public service in the same way that you buy a washing machine or a snowmobile. We must not give Canada's financial institutions a political weight that they should not have and that they do not want, an unprecedented role that is dangerous on several levels. The role is dangerous for the institutions themselves. They are at risk of being accused of political favouritism or of discrimination in one direction or in another, either by turning a candidate down for a loan, or by approving one. They are damned if they do and damned if they don't, as the saying goes.

That is indeed a risk that financial institutions cannot allow themselves to take in these troubled times, when the financial sector is under the glare of the media and the scrutiny of citizens and a whole host of political and socio-economic groups. The reputation, independence and freedom of action of these financial institutions are essential to the proper functioning of our economy, our society and our democracy. The exclusive power that Bill C-21 grants them thus presents a twofold problem, a problem of perception and a real risk, the danger of politicizing our financial institutions and a risk of discrimination involving these loans.

Let us for a moment look at the criteria the banks would use to determine which candidates they would or would not lend money to. They could use a purely financial criterion based on the personal solvency of the candidates, which would favour the rich to the detriment of everyone else; or they could do a risk assessment based on the political probability that the candidate would obtain sufficient support, which would translate into a sufficient number of yearly contributions of less than a $1,000 in order to reimburse the loan. What this means is that we are asking financial institutions to make political judgments. Those institutions could even assess the probability of the candidate getting elected, and see that outcome as increasing his or her solvency. With all of this, we would be politicizing our financial institutions.

Let us now look at the problem of discrimination.

The bill would disadvantage lower income candidates who did not have the necessary credit history to receive loans. It would discriminate against people based on income and credit rating therefore favouring the rich and excluding many people from public service, notably many women, youth, newcomers and minorities in general.

Let me reiterate this. The lack of credit could potentially prevent not only low or middle-income Canadians, but also many women, aboriginal people and new immigrants from standing for office. The size of a wallet or bank account should not be an impediment to prospective candidates.

This is particularly worrisome as it applies to women.

This bill would disadvantage women candidates who had left the workforce for a period of time, resulting in a fluctuation of their financial status. The United Nations has stated that a critical mass of at least 30% women is needed in order for legislators around the world to produce public policy that represents women's concerns and for political institutions to begin changing the way they do business.

According to Equal Voice, Canada falls behind this standard. Despite enjoying economic prosperity and political stability, Canada has fewer women in Parliament than most of Europe and many other countries in the world. In Canada's Parliament, just about 24% of MPs are women. This places Canada 40th in the world on the Inter-Parliamentary Union, “List of Women in National Parliaments”. For Canada, 40th is not acceptable.

Further, Equal Voice notes that women encountered many barriers in seeking elected office at all levels, including lack of access to finances. This is the basic point. Restricting access to loans by financial institutions could disadvantage and create a new barrier to women entering politics.

This House should not do anything that would hinder women's success in politics. On the contrary, this House must do everything it can to promote women's successful participation in politics.

To conclude, the Liberal caucus strongly argues for full transparency and disclosure of political loans.

However, we are opposed to the idea of having financial institutions be the only ones that can grant loans in the political arena. That possibility must also be given to citizens, as long as transparency is made the hallmark of those loans. After all, it is much more legitimate for citizens than for banks to grant loans of a political nature, in keeping with their political convictions, and their confidence in the values or political credibility of a given candidate. We would be in favour of an amendment requiring that these individual loans only be granted at commercial interest rates.

I hope that this constructive proposal from the Liberal opposition will be well received by the government so that we can make our democracy more transparent and more open to everyone.

[Tim Uppal, Conservative, Minister of State (Democratic Reform)]

Madam Speaker, I look forward to working with the member on this bill and having further discussion.

The fact is it is not only banks, but it is other financial institutions as well. Not just that, it is friends, family, supporters, the average Canadian who has the ability to make donations or to lend money, or even to guarantee money within the contribution limits.

Does the hon. member not think it is important to get out and engage Canadians and ask for that support? As members of Parliament, or as candidates, or as political parties, is it not important that we tell Canadians what we are about, tell them about our platform and ask for that support? Should we not ask them to be a part of the campaign and to donate money? It does not have to be $1,100. It could be $200, or it could be $50. It is a matter of engaging Canadians and getting more of them to contribute to a member's campaign either in donations, or loans, or as a guarantee. Is it not important to engage with as many Canadians as possible and to get that financial support so they are more engaged?

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

Madam Speaker, if the minister were to come in with a bill saying that the maximum is $1,000 for everybody, we would discuss whether it was reasonable or not, and I would not have a problem with ethics. I have a problem with ethics on moral grounds when he tells me it is okay for a bank, an insurance company, or whatever, to give more than $1,000, but it is not okay for a Canadian citizen. I do not understand what is the basic ground regarding the morality of the bill. I have a problem with that. My party has a problem with that.

If he were telling me that he does not want the amount to be more than $1,000, maybe I would argue that it is too low and that it should be $5,000 and we need to discuss it. However, he is telling me it is okay for a financial institution to give much more than that, but it is not okay for a Canadian citizen to do that. The problem is that a Canadian citizen has the right to have a political opinion, to have confidence in a candidate and to show it, while a bank is not supposed to have a political opinion.

I asked what the moral ground of the bill is. The minister did not answer. What would be the criteria for financial institutions to decide if a candidate were to receive money or not? Would it be that the bank sympathizes with the candidate's platform? What is it? It will politicize the banking institutions of this country and that is wrong.

[David Christopherson, NDP, Hamilton Centre, ON]

Madam Speaker, does the member for Saint-Laurent—Cartierville believe that the only changes necessary to funding leadership campaigns is more accountability? Does the member believe that we should still allow wealthy Canadians to totally bankroll someone's leadership campaign, thereby allowing the person possibly to go right from the street all the way to the Prime Minister's Office in one move?

I will be very curious to hear especially on the second question just what the member believes in terms of the health of our democracy with leaving that in place. Is the member saying that we should still allow wealthy Canadians to bankroll single-handedly leadership campaigns? I have not even made the point that under the existing regime hundreds of thousands of dollars of that money may never be paid back.

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

Madam Speaker, the Liberal Party fully agrees with everything that would provide accountability and transparency. Where we have a fundamental disagreement is when there is a bill before us which says that the financial institutions will have a monopoly and that Canadian citizens will lose. This I do not understand.

If my colleague was saying that we should cap the loans to a certain amount of money and we should strengthen the rules with respect to the obligation to pay back the money, I would be in full agreement. I have no problem with what is in the bill on that.

However, when he says that it is okay for the financial institutions to do so but not for Canadian citizens, I do not understand on which moral ground he is saying that.

He should be the first one to say that he does not want the power of big money involved, but that is what will happen now. That kind of monopoly power will be given to these institutions with respect to who will vote, who will campaign, who will run and who will not run. It will be detrimental and discriminatory, especially for women.

[Harold Albrecht, Conservative, Kitchener—Conestoga, ON]

Madam Speaker, it is important that we reflect on what got us to this point in the first place. The 2006 Liberal Party leadership race ended on December 3 and the leadership contestants had until May 3, 2008 to pay their debts. Most contestants were not able to repay their debts by May 2008, so an extension was granted. Then in 2011 another extension was given until December 2011.

How long does my colleague think this should be allowed to be perpetuated until there is no hope of possibly repaying?

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

Madam Speaker, I want to say to my colleague that the Prime Minister decided to change the rules retroactively. When we started the leadership race, the amount of money allowed was $5,200 and we booked our budget accordingly. When he decreased it by $1,100, it was very difficult for all the candidates, including myself, to adapt to this retroactive rule.

I am proud to say that I will completely pay my debt as a matter of honour; it is very important for me to do so, but it has not been easy because we did not plan for a limit that would be only $1,100.

I want to add that my point with respect to this bill is not that I am against any limit. I am against a discriminatory situation that would give the financial institutions more power than Canadian citizens.

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

Madam Speaker, in my colleague's opinion, when does a loan turn into a contribution?

We have seen with a number of the Liberal Party leadership candidates that five years has gone by. There have been loans--purportedly they are loans--that have gone unpaid for five years. At what point does the member actually think they should be considered to be a contribution?

That is what we deal with in this bill. I would suggest to the House and my hon. colleague that by anyone's definition, five years is far too long to have an unpaid loan. It must be considered a contribution at that time. Does he not agree?

[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?

[Alexandrine Latendresse, NDP, 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.

[Pierre Nantel, NDP, 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?

[Alexandrine Latendresse, NDP, 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.

[Paulina Ayala, NDP, 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?

[Alexandrine Latendresse, NDP, Louis-Saint-Laurent, QC]

Mr. Speaker, I feel that Bill C-21 is a step in the right direction if we want to achieve that goal. Thanks to good laws already in place, such as the Elections Canada Act, money matters less in our democracy than it does in other countries.

I think that we can take more steps in that direction to create one of the most user-friendly democracies in the world, a democracy meant for people, not for members of a select group that grease their own palms and hand out taxpayers' dollars to their friends.

I think that there are many ways to improve our democracy, and Bill C-21 is one of them.

[Nycole Turmel, NDP, Hull—Aylmer, QC]

Mr. Speaker, I am pleased to share my time with the hon. member for Terrebonne—Blainville.

Bill C-21, Political Loans Accountability Act, contains a series of measures to tighten the political financing rules. Among other things, the bill proposes to prohibit political entities from receiving corporate or union loans. Financial institutions, individuals, political parties and associations will still be authorized to grant or guarantee loans, as long as the terms of the loan, such as the interest rate, are divulged and everything is put down in writing.

As my colleague mentioned, Bill C-21 is a step in the right direction. The bill, to its credit, prevents situations like the one the Liberal Party currently finds itself in from happening again. Let us remember that, six years after the leadership race, many candidates still have not reimbursed the total amount of the loans they received to run their campaigns.

The issue even went before the Supreme Court of Ontario, which recently found the failed candidates with loans in arrears guilty of violating the Canada Elections Act. The court sentenced them to pay a fine of $1,000 or to serve three months in prison. It is important to note that, under Bill C-21, these loans that were not repaid would be considered political contributions after a period of three years.

In the report that he submitted to Parliament in 2007, the Chief Electoral Officer of Canada said:

The loans granted by lenders—who are not in the business of lending, who lend money at non-commercial rates, with terms that are not available to others, or in cases where there is little prospect of reimbursement—may be perceived as a means to influence the political entity to which the funds are provided.

The Chief Electoral Officer highlighted a weakness in our election financing system: lenders might try to influence political entities. That weakness had to be remedied. We have a duty and a responsibility to do everything we can to limit the influence of outsiders over political entities in this country. Bill C-21 proposes a solution worthy of consideration, and that is why, as was noted earlier, we are going to support it at second reading.

Once it is sent to committee, we will be able to improve it. While Bill C-21 means we are taking a step in the right direction, it is still in need of improvement. Yes, we support it, and I hope the Conservative Party will also be open to our solutions. For example, limiting the number of potential lenders is a good idea in theory, but in practice, problems might arise.

Take the case of financial institutions. As the bill now stands, there is nothing that provides for establishing rules that can guarantee a degree of impartiality on the part of the banks in granting loans.

Bill C-21 contains nothing that could guarantee that this process is fair to all candidates, regardless of party. The minister himself said in the past that he did not see the benefit of making the banks subject to a regulatory framework under Bill C-21. That is quite surprising to hear from the minister, because if his objective is to make the process transparent and democratic, it would be to our benefit to see this kind of thing in the bill.

Without clear rules to guarantee that the lending process is fair, we can easily imagine that the banks might be, let us say, more inclined to lend to certain candidates than to others.

That is not to say that this would happen systematically, but the risk of a bank denying a candidate a loan for political reasons exists, and that should never be the case. It is important to address that issue. Without clear rules, we are opening the door to the possibility of a bank denying a loan to a political entity on the grounds that it advocates an agenda the bank considers to be against its interests.

For example, would a bank agree to lend to a political entity that was proposing higher taxes on its profits? Perhaps; it might. The risk of it refusing based on the ideas advocated by the entity in question is our justification for making amendments to the bill. That is exactly the situation that has to be avoided.

Mr. Speaker, you will tell us that the banks are already free to grant or deny a loan to whomever they see fit. Fine. But by limiting the number of entities that are entitled to make loans, Bill C-21 places more power in the hands of the financial institutions. That power must not have an impact on candidates’ ability to finance their campaigns. That would completely defeat the objectives and the intent of the bill.

I hope that the minister and his Conservative colleagues will agree to work with the official opposition to prevent Bill C-21 from creating two classes of candidates: those who have no trouble raising campaign funds because they advocate ideas that will help banks make money, and all the other candidates.

After introducing the bill, the Conservatives issued a news release stating their intent to implement high standards of integrity in the political process. That is all well and good, but the government must work with all parties to ensure that integrity in the political process is achieved.

If that is truly their intention, why did they recently condemn public funding of political parties, which had the advantage of avoiding and eliminating any possibility of allegiance or political scandal?

It seems to me that the best way to curb private money's influence in the political sphere is to remove private money from the equation. Unfortunately, that is not the approach the government chose.

The NDP believes that any action taken to ensure that political funding and loans are as transparent as possible is a very good thing.

That is why, as another colleague said, we will support Bill C-21 at second reading. I sincerely hope that the Conservatives will be open to the changes we propose in committee, even though that has not been our experience in the past, I must say. We all have an interest in guaranteeing the independence of the people's representatives in this country. It is our duty to be above reproach, and we must prevent politicians from using their influence to obtain favours.

[Pierre Nantel, NDP, Longueuil—Pierre-Boucher, QC]

Mr. Speaker, I would like to begin by congratulating my colleague on her beautiful speech on this issue. The word “beautiful” is probably not the right adjective; it was, in fact, very enlightening.

Here is my understanding of the bill. Despite my colleagues' best intentions—and I may seem like a bit of a party pooper, here—does this not seem like a bit of a shift, which, I think, is clearly in their own best interest, tailored to suit their own way of doing things?

[Nycole Turmel, NDP, Hull—Aylmer, QC]

Mr. Speaker, I thank my hon. colleague for his question. I alluded to the possibility that candidates who apply for a loan from a bank might be refused simply because their political affiliations go against the banks' interests. That is what we hope to prevent. We want to ensure that candidates are respectful. We want to have the best possible candidates.

If the Conservative Party accepts our proposals, together, we could ensure that Canada has a truly open, transparent process that shows respect for individuals.

[Paulina Ayala, NDP, Honoré-Mercier, QC]

Mr. Speaker, I cannot help thinking that, by changing the rules on political party financing, we are opening the door to private donations.

As everyone can see here today, the NDP has many women and many young people in its caucus. I myself would not have been able to get a loan. I was a substitute teacher. We will not have any diversity in Parliament if we create such strict requirements and favour certain groups. Thus, I see a link between the political party financing that was eliminated and campaign financing.

I wonder if my colleague could expand on that a little more.

[Nycole Turmel, NDP, Hull—Aylmer, QC]

Mr. Speaker, I thank my colleague for her question.

It is very important that this principle be discussed. I am sorry the Conservative Party has decided to eliminate contributions or assistance for candidates. That is one way of reaching women. I am thinking of all our young people who took part in the last campaign. How can young people or women who have a career that is just starting out, and enormous student loans, also take on the job of an election campaign so they are able to put their ideas forward? That is what is unfortunate in this situation.

I would like to add, again, that I hope the Conservative Party, for once, will not impose the gag order or go in camera to discuss such an important issue.

[Alexandrine Latendresse, NDP, Louis-Saint-Laurent, QC]

Mr. Speaker, I thank my colleague from Hull—Aylmer for her speech. She is a very brilliant woman who understands the issues perfectly. It is terrific to be able to work with her.

What does she think about the fact that the bill was introduced over a year ago and seems to have fallen into some sort of limbo? We heard no more about it. The Conservatives have tried to ram through a whole pile of other bills any which way, and now they tell us they were simply waiting for everyone to agree.

I would like my colleague to comment on that, and tell us what she thinks about the very long time it took for Bill C-21 to come up for debate.

[Nycole Turmel, NDP, Hull—Aylmer, QC]

Mr. Speaker, I thank my colleague for her question.

It is very unfortunate that it has taken a year. We know how the Conservative Party does things. If they really wanted to make Bill C-21 a priority, they could easily have done it. Our party could have had discussions with them, as could all the other opposition parties, and we could have moved it forward and resolved this situation.

[The Acting Speaker, Conservative, Bruce Stanton]

Before acknowledging the hon. member for Terrebonne—Blainville, I must inform her that I will have to interrupt her at 11:00 a.m., when it is time for statements by members.

The hon. member for Terrebonne—Blainville.

[Charmaine Borg, NDP, Terrebonne—Blainville, QC]

Mr. Speaker, I am pleased to rise in the House today to speak to Bill C-21. I will start by saying that we will support this bill at second reading. I know it is rare for us to support a bill, but it is also rare for us to be able to examine an individual bill that is not part of a big omnibus bill. I ask the Conservatives to take that into consideration.

This bill prohibits corporations and businesses from granting loans to political entities. “Political entities” refers to political parties, associations, leadership candidates or candidates for nomination. Furthermore, this bill sets a time limit for paying back loans taken out by political entities: three years for leadership candidates, four months for a leadership candidate and three years for an association or party.

It is important to set limits on repaying loans. Otherwise, debts could accumulate indefinitely. Moreover, there is typically interest on these loans, which can be very detrimental to someone who, after running for leader or for election, will unfortunately have a lot of debt for a very long time.

Political parties will be responsible for paying back loans that are not paid back by the candidates themselves. Obviously, it is important for the financial institutions granting these loans to know that someone will be responsible for paying them back.

Another measure that I find very interesting is the measure that will enable leadership candidates to receive gifts up to a maximum amount per year instead of an amount per campaign. If someone is still in debt two years after the leadership campaign and has already asked all of his contacts, friends, family members and supporters to make a maximum donation, he is in trouble because those people cannot give the maximum amount again, which limits candidates' ability to raise funds to pay back loans within the deadline. This is a very interesting measure. I congratulate the government for having thought about this problem and for putting this measure in Bill C-21.

It is very important for us, as parliamentarians, to try to find solutions to the problem of debt incurred by candidates during elections or leadership races. These people end up with huge amounts of debt that they are unable to repay. We know that some of the candidates in our own leadership race still have a little bit of debt. There are also candidates in the leadership races of other parties who unfortunately still have a great deal of debt.

This measure is important for someone who will stand for election because they will know the consequences of ringing up that amount of debt. If they know that they have three years to repay the money, they may think twice about how much money they are going to spend and if they are capable of paying it back. This will also make people who stand for election more accountable.

In 2007, the Chief Electoral Officer released a report on political financing, which contained a number of recommendations. The changes proposed by the Chief Electoral Officer were intended to limit the influence of individuals and corporations on political entities, an influence that can be exercised through financing. Bill C-21 takes these recommendations into account. Once again, I congratulate the government for responding to the Chief Electoral Officer's recommendations. We know that quite often the government does not follow through with recommendations made by various stakeholders.

The changes proposed by Bill C-21 seek to eliminate the influence by the more well-to-do in the political world. If a lobby, corporation or individual with a lot of money can provide a loan to a candidate, the latter may be influenced by the ideas of the group, corporation or individual.

For example, if a group campaigns for a certain cause, the person may feel obligated to advance that cause in particular. I think that it is extremely important to bring back this aspect of democracy and to limit this type of individual or corporate loan. It would be extremely unfair if this could happen. It is thus extremely important that we take action, that we support these measures and that we limit financiers' influence on politics.

As we know, there are groups that may have really good ideas or policies, but they may not be able to provide a loan because of financial difficulties. It is thus important to be able to level the playing field so that people cannot say that certain groups with more money will be listened to but it is tough luck for everyone else.

I am also calling on the government to assess the point that my colleague mentioned in her speech. Some financial institutions may be more inclined than others to give parties loans. This is a cause for concern. I understand that financial institutions are supposed to act in an impartial and non-partisan manner, but one never knows. I think that it is this government's duty to assess the issue in committee in order to determine if there is a way to prevent this phenomenon.

I would like to once again applaud the measures put forward. However, I would just like to point out the fact that it is somewhat contradictory to promote these measures that will improve transparency by trying to limit candidates' debt and yet, at the same time, be prepared to limit the amount of money that political parties receive for each vote.

I see that my time is up. We will certainly be able to get back to this issue later on, Mr. Speaker.

[The Acting Speaker, Conservative, Bruce Stanton]

The hon. member for Terrebonne—Blainville will have two and a half minutes when the House resumes debate on this motion.

The House will now proceed to statements by members. The hon. member for Oshawa.

The House resumed 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.

[The Acting Speaker, Conservative, Bruce Stanton]

The hon. member for Terrebonne—Blainville has two and a half minutes to complete her speech, and then there will be five minutes for questions and comments.

The hon. member for Terrebonne—Blainville.

[Charmaine Borg, NDP, Terrebonne—Blainville, QC]

Mr. Speaker, I will pick up where I left off earlier.

Bill C-21 states that political entities must report loans in their financial statements. They must specify the amount of the loan, the interest rate, the lender’s name and address, the dates and amounts of repayments of principal and payments of interest, as well as any guarantor’s name and address and the amount guaranteed. The financial agent must report any amendment to the Chief Electoral Officer.

I would like to talk about this measure because I think that it will make transactions more transparent in terms of the lenders and the political entities receiving the loans.

This measure will also help the public find out where the money is coming from, when and how much. This is extremely important. Unfortunately, some entities are still not behaving ethically. We have seen the Conservative Party's questionable practices. In Quebec, the Charbonneau commission is looking into allegations of fraud. People are very concerned about this issue.

Many of my constituents are asking me what is going on and whether they can trust their representatives. These people watch the news and read the papers, so they are informed citizens. However, when they see things like this, they wonder whether democracy really exists in Canada and to whom their representatives are accountable.

I think that such measures will help boost public confidence in our democracy. People will certainly have more confidence that their representatives are following the rules and funding their campaigns appropriately.

Bill C-21 must move forward. I expressed some concerns about financial institutions. We will have to take a closer look at that issue. In general, we all agree that this bill should go to committee.

[Marjolaine Boutin-Sweet, NDP, Hochelaga, QC]

Mr. Speaker, this morning, before question period, my colleague from Terrebonne—Blainville said something I felt was very important.

She talked about the need to limit the influence that large lobby groups have on democracy. I would like her to comment further on that.

[Charmaine Borg, NDP, Terrebonne—Blainville, QC]

Mr. Speaker, I thank my colleague for her wonderful question.

It is a cause for extreme concern when a political party receives a large loan from a group with money in its coffers, because that group might be pushing certain ideas. Will the candidate feel inclined to promote these ideas because he received a large loan from the group?

Smaller groups with limited financial resources may not be able to give loans, which really puts some groups at a disadvantage. But this practice is still allowed, even though it is unethical and the House should not be using or promoting it.

I am happy to see that some measures are being put forward aimed at restricting and eliminating the possibility that entities will give loans to political parties or candidates.

[Pierre Nantel, NDP, Longueuil—Pierre-Boucher, QC]

Mr. Speaker, I commend my dear colleague for the views she expressed.

In keeping with the legacy of our former leader, Jack Layton, should we also mention how important it is to be optimistic about our parliamentary work and to strive to restore politics' noble reputation, especially among young people?

[Charmaine Borg, NDP, Terrebonne—Blainville, QC]

Mr. Speaker, indeed, it is very important to get young people involved in politics in general. We need to give them the assurance that their voice counts and encourage them to vote.

As I explained earlier, given all the negative events and the fraud that is happening left and right, young people are clearly not inclined to go and vote, as they wonder whether these people really represent them.

As parliamentarians and elected representatives of our ridings, we have a responsibility to put forward initiatives like these to combat the existing cynicism.

[Libby Davies, NDP, Vancouver East, BC]

Mr. Speaker, this is a complex issue. As my colleague said, we support the bill at second reading and want to see it go to committee.

There is one issue that we will have to examine closely, and that is whether there will still be loopholes that would allow people to get around the rules, even though the bill indicates that it would tighten up the issue around loans.

Would the member comment on that and the important work that probably needs to be done on the legislation? The committee will need to look at it very carefully.

[Charmaine Borg, NDP, Terrebonne—Blainville, QC]

Mr. Speaker, I believe this deserves a thorough study in committee, partly because of the issue with financial institutions. Will some institutions be more likely to give loans to some parties rather than others depending on how the party's position favours financial institutions? That issue deserves an indepth study.

As we have seen, there have been accusations, and that fact does bother some people. Without a doubt, if the manager of a business with 10 staff members asks each of them to donate the maximum amount to a specific political party, it would be extremely alarming.

We need to examine such behaviours and find ways to address them. I believe that if we were to study this bill and look for ways to go even further, it would be the ideal approach for citizens and for a better representation.

[Libby Davies, NDP, 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.

[Annick Papillon, NDP, Québec, QC]

Mr. Speaker, I first want to tell my colleague that I really enjoyed her insightful speech. It is also interesting to hear a member who has been in the House for some time and who still talks about how people feel when they witness a certain cynicism about politics. They sometimes feel like no one is listening to them.

I would like the member to comment on what an expert, the Chief Electoral Officer of Canada, had to say. Obviously, this is someone who knows what he is talking about. Marc Mayrand said it was impossible to enforce the law on political loans at this time, because it is overly complex, incoherent and ineffective.

I think there is a link between his comments and my colleague's speech. I would like her comments on this, namely on the importance of listening to what people in the field have to say about this.

[Libby Davies, NDP, Vancouver East, BC]

Mr. Speaker, many of the provisions in the bill are based on recommendations that came from the Chief Electoral Officer, and that is as it should be. This is an impartial individual who oversees the Canada Elections Act.

On the positive side, Elections Canada is a very well-reputed organization. It has good standing with an international reputation. However, as the member points out, this stuff gets complicated, even for MPs. We want to follow the rules and do what is right, but there are so many nuances and things to pay attention to in terms of election financial reporting and so on. Therefore, anything we can do, through this bill or other measures, would make the process clearer and more transparent for both ourselves and the general public in terms of accountability.

We have seen all kinds of awful situations. For example, the in and out advertising scheme that the Conservatives engaged in. They basically denied that they did anything wrong and then pleaded guilty at the end and had to pay fines. Clearly there are issues that still have to be addressed and I think that we should pay attention to the Chief Electoral Officer.

Bill C-21 is one step, but this is something that needs our ongoing vigilance.

[Marjolaine Boutin-Sweet, NDP, Hochelaga, QC]

Mr. Speaker, I would first like to say that I greatly admire my colleague from Vancouver East for her great wisdom and all the experience she brings to our discussions.

Earlier, she mentioned the shortcomings of Bill C-21. Based on her experience, which important issues should be discussed in committee, once the bill reaches the committee stage?

[Libby Davies, NDP, Vancouver East, BC]

Mr. Speaker, I do not know specifically of any loopholes. However, I asked the parliamentary secretary to the government House leader earlier what he thought about loopholes, as he has been very involved with the bill, and he did mention one potential area where something could apply locally but not at a national level.

Maybe there are no loopholes in the bill, maybe it is airtight. However, it does require a very close examination to ensure that one cannot get around the principles being put forward on loans by doing indirectly what one is not allowed to do directly.

I have full confidence that the NDP members on committee who get this bill will do their due diligence in examining the bill in great detail. Maybe there will be amendments and when it comes back at report stage we will have an improved bill. We know what we are looking for and what we want to accomplish here, but I think that will be the work of the committee. I look forward to it.

[Annick Papillon, NDP, Québec, QC]

Mr. Speaker, I am very pleased to rise here in the House and to take part in today's debate on Bill C-21. I would like to begin my comments on this bill by paying tribute to a former leader of the New Democratic Party of Canada, who represented the Ottawa Centre riding, for he was the first person to point out that the political donation regime in this country has a very obvious loophole. Mr. Broadbent had the sense to recognize that even though the maximum amounts of money that can be donated to a political campaign or to a political party had been reduced, by allowing these huge loans, which never really have to be paid back, it was obvious that somebody with a lack of ethical standards would take advantage of that loophole and act as though there were no financial limits. I therefore wish to recognize Mr. Broadbent for raising this issue for us in his ethics package.

The reforms to our political financing regime introduced by the Liberal government in 2003 limited donations to political parties from individuals and corporations, but, they did not limit political loans. The Federal Accountability Act, which passed in 2006, amended the political financing regime by lowering private contribution limits from $5,000 to $1,000, but it did not address the question of loans. That explains why we are debating this here today, and that is what Bill C-21 is meant to correct. Everyone agrees that this is a problem. We need to listen to all of the solutions being proposed and, together, come up with the best way to solve the problem.

Bill C-21 proposes prohibiting unions and corporations from granting loans to political parties and election candidates. Most of these changes were requested by the Chief Electoral Officer some years ago. Indeed, in 2007, the Chief Electoral Officer published a report on political financing that included a series of recommendations. The Chief Electoral Officer's proposed changes were aimed at limiting the influence of individuals or corporations on political parties, since this can occur through financing. Bill C-21 is based largely on those recommendations, which is why we support it at second reading.

This bill, if passed, would establish a strict reporting regime for all political loans, which would include the mandatory disclosure of the identity of the lender and the terms of the loan, such as the interest rates. In addition, loans by individuals would be limited to $1,100 and only banks and political parties would be authorized to lend higher amounts. Under this bill, loans from individuals not repaid within 18 months would be considered contributions, and loans not repaid to financial institutions would be transferred to riding associations, which would become responsible for their repayment.

At present, the rules for political loans do not satisfy the standards of accountability, integrity and transparency that Canadians expect of their political process. I cannot emphasize enough how important this is. In that regard, Bill C-21 seems to be a step in the right direction and that is why the NDP will support it. Believe me, we are here to support any good initiative. For once, the government is headed in the right direction.

These new measures will foster greater fairness and ensure that the political process is and will always be in the hands of the people. A campaign should always be about ideas and not about who can spend the most money. That is not what a leadership race should be about. Members must first and foremost be accountable to their voters. It is important to eliminate the possibility of undue influence of elected representatives by corporations.

Bill C-21 would also amend rules for leadership races. In that regard, the most striking example, and the one that has garnered the most public attention, is the Liberal Party of Canada leadership race.

Even if companies and unions did not have the right to contribute a single dollar, they could still lend tens and hundreds of thousands of dollars. Individuals could also lend much more than they were allowed to donate. We do not want to see a repeat of what happened with that party, where six years later, leadership candidates seem to have simply abandoned the idea of repaying their campaign debts. It is completely unacceptable.

If that is the case and a candidate was backed by individuals, then in reality those individuals bankrolled a big part of the candidate's campaign. If the debt is never paid off, then we end up in exactly the situation that we are trying to avoid, which is single individuals, single corporations and single unions providing tens, and possibly hundreds of thousands of dollars to one candidate.

Liberal members point out that Bill C-21 could prevent more women from entering politics. I think that the reverse is true. The bill will level the playing field so that people who are sponsored by companies, as was the case in the Liberal Party of Canada leadership race, will not have a competitive advantage over a woman who does not have this sort of backing. The purpose of Bill C-21 is to eliminate the influence of the wealthy in politics, while the under-representation of women in politics is a complex issue due to many factors that go well beyond political loans.

Some members are wondering how they will be able to raise money if backers are only authorized to donate a maximum of $1,100 per candidate. They are also concerned about the fact that Bill C-21 will prevent donors from making a donation to a leadership contestant if the candidate has outstanding debts.

The Chief Electoral Officer, Marc Mayrand, recently made a very important statement. He said that it is virtually impossible to enforce the law on political loans because it is “not only overly complex, it's incoherent and ineffective.”

We have this expertise, we have recommendations from Elections Canada. This is an example that relates to Bill C-21. However, in all kinds of other scandals where we have to shed light on what happened, it is important—I cannot repeat that enough—for this government to listen to recommendations from Elections Canada and the experts working in the field, to take the necessary action.

A number of these concerns from people in the field are legitimate, and that is why we must carefully examine each clause of this bill. I hope that there will be some latitude in committee to discuss what kind of system to adopt and what protection measures could be implemented. Every time we consider limiting the ways Canadians can collect funds to participate in an election, we must ensure not only that the system is fair, but also that everyone has access to funding, regardless of political affiliation.

We support the idea of eliminating the loophole. However, we feel that some improvements are necessary in order to strengthen our system.

We are very concerned to see banks and other financial institutions become the sole sources of financing without being required to subsidize all parties, regardless of the circumstances. This is a big problem, but we can resolve it. If we want, we can find ways to include conditions that would be acceptable to everyone involved, in order to make things fairer.

I am sure that we could find a solution that would meet the government's objectives—to standardize the financial rules—and ensure that our electoral laws are applied equally across the country, so that in future federal elections, everyone—and I mean everyone—has equal opportunity and those who are supported by certain companies do not have an unfair competitive advantage.

[Marjolaine Boutin-Sweet, NDP, Hochelaga, QC]

Mr. Speaker, in the last election in May 2011, the NDP succeeded in getting a record 40% women elected. Women were also very well represented in our leadership race.

In the opinion of my colleague from Québec, how important is it to fix the rules on political loans with respect to women's representation in politics? In society, women account not for 40% or 30% of the population, but 51%. How could the rules we would like to see adopted here create a more gender-balanced representation in the House of Commons? I see it as essential.

[Annick Papillon, NDP, Québec, QC]

Mr. Speaker, I thank my colleague for bringing up this important point.

We can never repeat it enough: the NDP made a historic achievement when 40% of its elected candidates were women; no other party has ever achieved such a record. I believe we can congratulate ourselves, because it is fantastic. I thank my colleague for bringing it up. Women's rights are important. This is a point we have also raised when discussing other bills, which shows how strongly we support it.

Bill C-21 really aims to eliminate the influence of the richest participants in politics, so that one candidate is not favoured over another, or a female candidate is not favoured over a male one. This is a very important objective, in my eyes. The goal is not to favour one party or one group over another.

This is what we will need to discuss in depth when the committee studies this bill, to ensure there is no favouritism and all candidates have an equal chance. I believe it is important, and it also speaks to what democracy is all about. I know everyone on this side of the House shares this idea with deep conviction.

[Pierre Nantel, NDP, Longueuil—Pierre-Boucher, QC]

Mr. Speaker, I would like to give sincere thanks to my colleague for what she told us today and for speaking with the conviction which accurately reflects what motivates us.

I hope that the people who are listening to what goes on in the House at the moment can hear the originality and sense of political renewal that characterize her and that have characterized the party for a long time now.

In her view, could we not imagine that giving a signal that politics can be virtuous might be the beginning of a promising collaboration?

[Annick Papillon, NDP, Québec, QC]

Mr. Speaker, I have caught the ball on the fly and I am also going to talk about another historic exploit accomplished by the NDP. We are going to talk about it. Let us talk about our young people. It is fantastic. People cannot get over the fact that our party is made up of people from 20 to 70 years old, and even a little older. We have brought together people from all generations and this is a wonderful thing. I commend Jack Layton on his excellent work. I also applaud the work that has been done by my leader. It is like a breath of fresh air and we all want to start out on an equal footing.

I was saying that the NDP does not automatically favour men rather than women and I can also say that we do not favour those who are older as opposed to those who are younger and who are able to rise to the challenge of carrying on a real debate here in the House and proudly representing their regions and their constituents.

[Charmaine Borg, NDP, Terrebonne—Blainville, QC]

Mr. Speaker, I would like to congratulate my colleague on her excellent speech and on the passion with which she speaks every day in this House.

On reading the bill, I found a flaw in terms of financial institutions. In my colleague's view, is it possible that financial institutions might prefer certain political parties rather than others?

Does my colleague agree that this question should receive further consideration?

[Annick Papillon, NDP, Québec, QC]

Mr. Speaker, my colleague has just raised an excellent point.

It is not a matter of putting everything into the hands of the financial institutions but really of ensuring that everyone has an equal chance. I think this is really the solution. We will have to consider all aspects of any concrete solution that is put forward in committee in order to remedy this problem.

There is indeed a problem. We saw it during the Liberals’ leadership race. We want to resolve this issue and we will have to hold a debate about it in committee.

[John McCallum, Liberal, Markham—Unionville, ON]

Mr. Speaker, I am pleased to rise to speak to Bill C-21 which, for reasons I will explain in a moment, the Liberals will oppose.

The bill does a number of things. It amends the Canada Elections Act in the following ways: All loans to political entities, including mandatory disclosure of terms and the identity of all lenders and loan guarantees, must be uniform and transparent. We are fine with that. Unions and corporations are prohibited from making loans to political parties, associations, or candidates. That is fine. Limiting the amount of loans and loan guarantees that individuals can make within the framework of the permitted individual annual contribution is also fine. Limiting the ability of financial institutions and political entities to make loans beyond the annual contribution limit for individuals and only at commercial rates of interest is the part we do not agree with. Finally, there are tighter rules for the treatment of unpaid loans to ensure candidates cannot walk away from unpaid loans.

The Liberal caucus certainly is in favour of full transparency and disclosure of political loans. We are also in favour of forcing those loans to bear commercial interest rates.

What is a problem for us is when the bill says that only financial institutions or banks will have the authority to make these loans.

Before entering politics, 12 years ago, I worked for the Royal Bank. So I am well aware of how banks work. In my view, it is not the banks that asked for this exclusive authority, but rather the government that wants to give it to them. This puts too much power into the hands of the banks. Basically, the banks would have the authority to make political choices by lending money to the candidate they like the most and by not giving a loan to a candidate they do not like. I am not saying that that is what they would do, but all the same, it gives excessive power to the financial institutions.

Furthermore, with these rules, the candidates with more money, the candidates who are wealthier, would have an advantage, because they would have a better credit rating than candidates who are not as wealthy. This kind of system would favour the rich rather than treating everyone fairly. The system might also be unfavourable to women, especially to those who are going back into the labour market after a number of years at home. They might be less able to borrow money from a bank because they would not have as much money.

For all of these reasons, the Liberals will be voting against this bill.

I want to emphasize that it is only the exclusive aspect of the banks being the only lenders that we object to. We are entirely in favour of total transparency, total disclosure, the requirement to pay commercial interest rates, and so on.

In closing, I would remind the House that the Prime Minister has not, to this day, disclosed any of the names of the people who contributed to his leadership campaign, let alone the sums involved, let alone whether he borrowed any money. I would say that what is sauce for the goose should be sauce for the gander. I would suggest that as the government is moving forward with this law, now would be a good time for the Prime Minister to disclose at least the names of his donors, if not the amounts.

Perhaps during questions and comments one of the Conservatives could give their view on the proposition I just put forward.

[Charmaine Borg, NDP, Terrebonne—Blainville, QC]

Mr. Speaker, I am a little bit surprised to learn that the Liberal Party will vote against this bill. Do the Liberals not understand that it is necessary to clarify the rules in order to limit the power held by groups or third parties over funding for political parties?

Perhaps the Liberals do not understand how serious the situation is. An affluent group will be able to give because it has more money, while a rights advocacy group for instance will not be able to donate. There is therefore a chance that a candidate will do what he or she is asked to do by the lender.

Can my Liberal colleague explain a little more clearly why the Liberals have decided to vote against the bill, which seems hypothetically to be a very good thing for our democracy?

[John McCallum, Liberal, Markham—Unionville, ON]

Mr. Speaker, I think I was very clear on this issue. I said that the Liberals were totally in favour of these transparency rules that aim at disclosing all funding. The only thing we do not like about this bill is that it gives financial institutions exclusive authority for granting loans. I explained our reasons, that it was worse for women and for those who were not as wealthy. This is why we are against it. I think I was clear about this, and I think this is a good reason not to support this bill.

[Anne Minh-Thu Quach, NDP, Beauharnois—Salaberry, QC]

Mr. Speaker, I would like to comment on the fact that this bill might be unfavourable to women. I do not agree at all. Financial institutions are not the only thing that matters when we talk about women becoming involved in politics. It is a social issue and one that relates to the place of women in political parties. It is much more than just a question of money; it is a question of openness, of position and of the steps being taken to promote the involvement of women.

What does the Liberal Party have to propose to encourage women to become more involved in politics, as the NDP has done? Is it prepared to be more open so the interests of women are represented? I can give as an example the vote on motion M-312 earlier this week. There are parties that clearly defend women's rights, such as the NDP, which voted unanimously on that motion this week.

Can the Liberal Party acknowledge the fact that it is not just money that determines whether women become involved in politics or not?

[John McCallum, Liberal, Markham—Unionville, ON]

Mr. Speaker, I think the Liberal Party has been and is still extremely open to women, whether we are talking about women standing for election or becoming involved in other areas.

Our opposition to this bill, to giving the banks exclusive lending authority, is supportive of women. As I said in my speech, of course not all women are poor, but some women who stopped working in order to stay home and who are going back into the labour force may perhaps be less wealthy than some men are.

We are not saying that the banks cannot make loans; we are saying that the banks should not have the exclusive authority to make loans.

[Tim Uppal, Conservative, Minister of State (Democratic Reform)]

Mr. Speaker, I am very pleased to see co-operation in the House, which is somewhat unique, to move the bill forward and close the loopholes that need to be closed.

However, it is unfortunate that instead of working with the other parties to move the bill forward and close these loopholes, the members of the Liberal Party have decided to side with their insiders who have yet to pay back their unpaid debts from their leadership races. Despite six years of leniency from Elections Canada, those individuals have not paid these debts back.

Why does the hon. member not believe that it is important to take big money out of the political process? What the bill does is get unions and their big money, corporations and wealthy individuals out. It closes that loophole.

Ordinary Canadians are expected to repay loans with strict rules and guidelines. The same should apply to politicians. Why do the Liberals not believe that?

[John McCallum, Liberal, Markham—Unionville, ON]

Mr. Speaker, if the minister wants to be so terribly co-operative, one way he can get Liberal support is simply to deny the exclusive right of financial institutions to make these loans. It should be broadened. That is what I said in my speech.

If the minister thinks he is so co-operative, why does he not consider an amendment of that kind? Then he would have the Liberals on side. However, he is all keen to go in this one direction without any consideration for compromise or negotiation with us. I do not know why he thinks we should come on bended knee and support his bill for which he has absolutely no flexibility.

[Jamie Nicholls, NDP, Vaudreuil—Soulanges, QC]

Mr. Speaker, it appears to me that the purpose of the bill is to try to get big money out of financing. The member has mentioned he has problems with it being limited to financial institutions. What kind of entities is he talking about in terms of funding for political candidates?

[John McCallum, Liberal, Markham—Unionville, ON]

Mr. Speaker, individuals perhaps could lend money as long as their identities were made clear, as long as the amounts were made clear and as long as the interest rate was commercial.

For example, sometimes the family members of a candidate might want to lend some money. Maybe we are talking about an individual who does not necessarily have the world's greatest credit rating and might have trouble getting money from the bank in significant quantity. This person might have friends or associates who would be willing to lend him or her some money. As long as it was clear, transparent and at commercial interest rates that would fine and it would give greater flexibility to the system without any loss of transparency.

[Mathieu Ravignat, NDP, Pontiac, QC]

Mr. Speaker, I know that my Liberal Party colleague is someone who has a great deal of experience and a balanced outlook on life.

It is completely normal for Canadians to question the relationship between economic power and political power, and the impact that financial institutions may have on the economy.

I would like to know a little more about what my colleague would do to ensure that these types of schemes never happen again.

[John McCallum, Liberal, Markham—Unionville, ON]

Mr. Speaker, I would like to thank my colleague for his question.

We want these rules to be as transparent as possible. We agree with many items in the bill. The only thing we do not like, as I have said a number of times, is the exclusive authority for financial institutions to make loans. Yes, they can make loans, but others should also be able to do so. This is the biggest change that we would like to make in the bill, but obviously the government does not want to co-operate.

[Scott Andrews, Liberal, Avalon, NL]

Mr. Speaker, it is so important to have openness and transparency in the electoral process. Not allowing someone to get a loan from a family member would probably prevent that person from getting involved in politics.

The member is a former bank executive. Banks do not normally give loans to political parties or political individuals. It is very difficult to get a loan from a financial institution for political purposes. Maybe the member could shed some light on that.

[John McCallum, Liberal, Markham—Unionville, ON]

Mr. Speaker, I was not lending money. My lending limit when I was working for Royal Bank was always zero, so I was not a real banker. I was a chief economist and talked about stuff like that, but I do know a bit about the process.

It is obvious that a bank is a money-making institution. It does not lend money just out of the goodness of its heart. It only lends money when it is pretty sure it will get that money back with interest, so it looks very closely at the credit ratings of individuals in determining whether to lend and how much to lend.

We can be sure that if a candidate does not have the best credit history or perhaps does not have a high-paying job, then that person would have great difficulty getting a loan of any significant amount from a bank. However, that person could perhaps get a loan from colleagues or friends or family. I do not see what is wrong with that as long as that process is transparent and clear. That is the main difference between what we are saying and what the government is saying.

[The Acting Speaker, Conservative, Bruce Stanton]

Is the House ready for the question?

[Some hon. members]

Question.

[The Acting Speaker, Conservative, Bruce Stanton]

The question is on the motion. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

No.

[The Acting Speaker, Conservative, Bruce Stanton]

All those in favour of the motion will please say yea.

[Some hon. members]

Yea.

[The Acting Speaker, Conservative, Bruce Stanton]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Acting Speaker, Conservative, Bruce Stanton]

In my opinion the yeas have it.

And five or more members having risen:

[Gordon O'Connor, Conservative, Carleton—Mississippi Mills, ON]

Mr. Speaker, I rise on a point of order. There have been discussions among the whips and I believe that if you seek it you will find agreement, pursuant to Standing Order 45(7), to defer the vote on the motion to the end of government orders on Tuesday, October 2.

[The Acting Speaker, Conservative, Bruce Stanton]

Is that agreed?

[Some hon. members]

Agreed.

[Gordon O'Connor, Conservative, Carleton—Mississippi Mills, ON]

Mr. Speaker, I ask that you see the clock at 1:30 p.m.

[The Acting Speaker, Conservative, Bruce Stanton]

Is that agreed?

[Some hon. members]

Agreed.

[The Acting Speaker, Conservative, Bruce Stanton]

The House will now proceed to the consideration of private members' business as listed on today's order paper.