Procedure and House Affairs Committee on June 14th, 2007

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

And the Liberals?

[James Carroll]

I would leave it to the Liberal members of the committee to pass judgment on the bill. I don't intend to offer an opinion on the bill, one way or another. I would say, though, there are a number of things that political parties and Parliament can do to help women get a much more equitable share of representation.

One of the things our party has done is set a target that at least one-third of nominations across the country be women this time. We intend to have an escalator on that for subsequent elections. But I wouldn't think there is only one approach to helping women get into Parliament.

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

Absolutely. I see this as one tiny step in the right direction. It may not mention women and it may not do what the NDP does already, which is to set a $5,000 limit on what you can spend for a constituency nomination, which we'd love to see in this bill, but at least it puts a limit on loans, which is going to mean a more level playing field in terms of women versus men getting access to the system.

[Jack Siegel]

I'm wondering if I could try this.

I absolutely agree with the goals you're putting forward. Not only am I a member of the Liberal Party, I'm a member of Equal Voice. But it seems to me that in order to get there in this legislation, if you start broadening the scope and put a $5,000 cap on it, you're restricting everybody's ability to upset the apple cart. If you don't have enough financial resources in a campaign—and this is really reflected in municipal elections, certainly where I come from in Toronto—you can't overturn the status quo very readily with very low spending limits. You need a superstar with a huge profile, or incumbents just keep winning.

In the federal dynamic, we have the party shift. But past candidates I think are going to be favoured, because they're better known, by and large, if you limit the spending too much, or the access to money.

What's more, I see this legislation pretty much as gender neutral. In bringing down the level of access to funds, you equally clip the wings of the women who have financial resources as well as the men. There may be some numeric differences as to how many of them, but at the same time there are women who absolutely have that access who aren't going to be able to make use of it to get there.

And I'm having enough trouble right now recruiting female candidates. I don't need any more barriers.

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

I'm glad you've followed the NDP model of setting quotas. We have a 50% target.

[The Chair, Conservative, Gary Goodyear]

Order.

Thank you. I allowed that to go quite a bit over because we are limited. We don't have that many more questioners. If we need another round, I'm happy to do that.

We're entering our third round now, five-minute rounds, still.

Monsieur Proulx, five minutes.

[Marcel Proulx, Liberal, Hull—Aylmer, QC]

Thank you, Mr. Chair.

My question is to Mr. Siegel and also Monsieur Gardner and Monsieur Hébert-Daly.

I'm going to start with you, Mr. Siegel, because you're the one who looks the most like a banker.

[Jack Siegel]

My mother might like that, but I don't know who else would be so thrilled.

[Marcel Proulx, Liberal, Hull—Aylmer, QC]

Mr. Siegel, it has been mentioned that banks would not necessarily be drawn to making loans or handling all the paperwork in this. If we look especially at proposed subsection 405.5(4), because of the individual's—whether it's a loan, whether it's a guarantee, a surety, or the individual's contributions, all within the limit—Would you explain to the committee where you see a major problem in that sense? And how would banks know if they're participating in something illegal without having a detailed statement from the guarantor? Because the bank has no way of knowing if he's already given a contribution of x number of dollars. The bank has no other way of knowing if he's already endorsed somebody else. I have a suspicion that if I or a candidate were to go to a bank and request a $50,000 loan, banks wouldn't necessarily be interested in handling 50 guarantors.

So we'll start with you, Mr. Siegel, and maybe you can answer for everybody else.

Mr. Chairman, my question is for Mr. Siegel, but Mr. Gardner and Mr. Hébert-Daly are also free to respond.

According to proposed subsection 405.5(4), contributions, guarantees and endorsements must respect the limits that apply to an individual. How will a bank go about determining that the individual who guarantees a loan is not acting illegally, since the bank has no way of knowing if this individual has already contributed an amount equal to the limit or has already acted as a guarantor for another candidate?

If a candidate is asking for a $50,000 loan, a bank will not necessarily want to have to deal with the paperwork for 50 individual guarantors.

I would ask Mr. Siegel to begin, because he is the one who looks most like a banker, even though he seems rather reluctant.

[Jack Siegel]

Under Bill C-24, the banks, being somewhat conservative in their practices, pulled away somewhat, certainly in my experience, from their generosity in the political process. That was not only because their political giving was so limited but was because the status quo, as it stands today, and in the absence of this bill, is that a loan becomes a contribution if it defaults. They can't just be generous and write it off in accordance with their practices, which is one of the exceptions, in which case somebody is going to scream about who gave the politician a break when they do write it off.

There was a very real concern under Bill C-24 about not getting into the situation of becoming an illegal contributor or taking a guarantee that made somebody an illegal contributor because their guarantee did convert anyhow, if called upon, into a contribution.

So the problem already exists. This legislation.... And I did, when it was introduced, call a friend who works for one of the banks. His answer was that there's just no way he'd be recommending to his client that it engage in any loans here. And the point we discussed was just that of the guarantee, the logistical problem of 50 guarantees, and how much paperwork that is for a $50,000 loan over a short term. There's not much profit in those loans, yet you're going to put a lot of person power into it.

But over and above that problem is the illegal guarantee, because the guarantor also made a contribution to another candidate in another riding, unbeknownst.... You're all innocent in doing this. And the unsophisticated but generous person doesn't even realize that he or she has overstepped. Is that guarantee, being an illegal guarantee under this legislation, an enforceable guarantee? The bank has no way of knowing the answer to that question. They don't want to find out by litigation. We lawyers charge enough that it's going to cost them more than any margin or risk they had on the table to begin with.

It's only one conversation, but if you can ask the banks—and I can understand their lack of great desire to get up in public and talk about what they will or won't do in the political sphere—whether they are really anxious to do this business under these terms, I strongly suggest that the answer is going to be “not really”.

[The Chair, Conservative, Gary Goodyear]

Okay.

[Gilbert Gardner]

It is up to the individual to ensure that the contribution limit is respected. In fact, it is up to the individual to remain within the annual contribution limits that are set out in the act. Until they become aware of it, associations that receive this money are not considered liable. The offence is committed by the individual.

In such a case, the bank would not be at fault, it would be the citizen who guarantees the contribution for more than one individual. That is his legal responsibility. However, it is obvious that this would affect the potential reimbursement by the guarantor who had exceeded his annual contribution limit, and who may have guaranteed loans with a number of financial institutions. Moreover, generally speaking the Canada Elections Act is probably of very little interest to our financial institutions. The fact that it is constantly changing does bother them, it isn't their cup of tea.

When deciding whether or not to grant a loan, a banker is more likely to consider the good faith and the reputation of a person rather than legal technicalities. That is what happens in the real world.

[The Chair, Conservative, Gary Goodyear]

Can I just interrupt? We're going to allow you to finish there.

We do have lunch now. I would encourage people and invite our witnesses to please help yourselves as quietly as you can and then just take your seats back. We're going to carry on the meeting as we eat, so feel free to do that. That's how we do business here. We're under the gun, so by all means feel comfortable. Get yourself some food and then have a seat, again as quietly as possible.

I do not have any more questioners on my list, so I'm going to allow this answer to continue. Madam Redman, I can put you down as well, but let's finish this question.

Please continue.

[Eric Hébert-Daly]

Essentially my answer is similar to Monsieur Gardner's. In fact, it's not up to the bank to govern the Elections Act, it's up to Elections Canada to do that. Just the same as if somebody votes twice, you don't expect anyone else to look after that, it's the responsibility of the commissioner. So I think that's the most important thing.

The other thing is, and again in terms of guarantees, this comes back to the rebate assignment in large part as part of the answer to this question, and that is where I think most ridings and most campaigns are going to find themselves relying on that guarantee.

There's also, frankly, the reality that our ceilings are low enough, I think. In the opinion of the party, we think the ceilings right now are low enough that in fact it is possible to raise the amount of money that you need throughout the year, throughout the period of time that you have between elections. Although elections are happening more frequently than they probably used to, despite that, there's still enough time to be able to raise the sufficient amount of money. So actually loans may not even be necessary, and that's the hope of all riding associations in campaigns.

We don't always work very hard to do that, unfortunately, but that is certainly one of the answers to how we get this accomplished.

[The Chair, Conservative, Gary Goodyear]

Would we care to comment? Ms. Lang-Dion, would you care to comment? You're comfortable?

Colleagues, I don't have anybody else on my list of questioners, so I'll just make one more request. Are there any other questions for our witnesses?

Madam Redman, please.

[Karen Redman, Liberal, Kitchener Centre, ON]

I just want to go back to something Mr. Siegel said, because I think it's very important. It's the fact that, despite some people's interpretation and assumption that this may bring the barriers down for women, indeed it is largely gender neutral.

I know that the Equal Voice witnesses have talked about doing good research, and in the Prime Minister's task force for women entrepreneurs, which was about five years ago now, we did extensive research. What we found was that banking and financial institutions treated men and women equally badly if they had no credit rating and they had not amassed assets. Women generally are disproportionately represented in that area.

So I still do hold one of the concerns that there may be unintended consequences to women that, despite the fact that this largely is gender neutral, will actually negatively or could prospectively negatively impact women.

It seems to me that one of the areas one can't cover off quite as neatly with Mr. Hébert-Daly's comment about the ceilings being low enough is really that of leadership. It seems to me that the whole issue of leadership is another category that's different from whether or not we run as candidates, notwithstanding the incumbency factor and other things that have been said. That does seem to me to be impacted, again, disproportionately, in a way that I don't think the act covers off to my satisfaction.

[The Chair, Conservative, Gary Goodyear]

Is that to anyone in particular?

[Karen Redman, Liberal, Kitchener Centre, ON]

It's probably a comment as much as a question. I don't know if anyone wants to respond.

[The Chair, Conservative, Gary Goodyear]

Seeing that no witnesses are offering to step up, I just want to insist that people get up and have lunch before we end up with a hypoglycemic effect around the table.

I wonder if I could just take the opportunity to ask our witnesses two questions. In reference to the act, the reference is made to “18 months after the day on which the loan was made”. There have been some suggestions that the 18 months be extended to three years, as well as that the term “after the loan was made” be changed to “after polling day”.

Does anyone want to—

[Jack Siegel]

There was some background noise. You got drowned out.

[The Chair, Conservative, Gary Goodyear]

I'm sorry.

The act refers to paying the loan back 18 months after the loan was made. There has been some suggestion that be changed to three years after polling day. Is there any comment on that, please? If there are any, I would like to hear them.

Mr. Siegel, do you have any comments on that?

[Jack Siegel]

To no one's surprise, of course I have a comment.

I think anything that makes it easier to run and engage in the process is beneficial. I think the 18-month limit, which pervades this bill in so many of the clauses, has its root in the provisions that exist in the Elections Act—and have for some time—about closing off the books in a candidate's campaign and really moving forward. It started just with the campaign's debts and the creditors. Having that time limit extended to three years would certainly be beneficial.

I would suggest that ordinarily the amortization of an awful lot of bank loans is longer than three years. Why should the political borrower be subject to a dramatically tighter timeframe than any commercial borrower? Where is the policy reason for that?

[The Chair, Conservative, Gary Goodyear]

Mr. Gardner, do you have any comments on that?

[Gilbert Gardner]

I don't want to encourage Elections Canada to drag its feet in providing the refund, but its representatives may be able to tell you how many associations and candidates have still not received their refunds, since the 18-month deadline for the January 23, 2006 election will soon be upon us. How many associations or candidates have yet to be reimbursed? According to my estimate, there must be more than 100.

Elections Canada could surely provide you with these statistics which will demonstrate that 18 months is far too short a time.

[The Chair, Conservative, Gary Goodyear]

Mr. Hébert-Daly.