Procedure and House Affairs Committee on Oct. 18th, 2012

[Craig Scott, NDP, Toronto—Danforth, ON]

Okay, I think we might have to come back to this in clause-by-clause. I'm not convinced it is at all clear.

On deemed contributions, proposed section 405.6, the rule is that unpaid loans after three years are deemed contributions. That includes loans from financial institutions, and, by definition, financial institutions can lend more than $1,200.

What are the consequences of this? What does it mean to say a financial institution has made a contribution after the loan is deemed unpaid? Companies can't contribute. I don't really see in the provisions what the consequence of having a financial institution deemed as a contributor is. Perhaps it is somewhere and I haven't read it carefully enough.

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

It is a process for that loan to be then written off by the financial institution, but I'll let Matt comment.

[Matthew Lynch]

Yes, the deemed contributions would actually be fairly rare. There are a certain number of circumstances that avoid unpaid debt being a deemed contribution. Notably, a financial institution can write off the debt as being unpayable, and in that case it wouldn't be a deemed contribution.

If that wasn't the case and it is a deemed contribution, in theory it would be potentially an offence, and a determination would have to made whether it was a wilful contravention of the contribution limits or not.

[Craig Scott, NDP, Toronto—Danforth, ON]

Okay, thank you.

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

Further to that, even if it is going to be written off, the Chief Electoral Officer would have to be in some type of agreement for it to be considered to be written off.

If you don't mind, perhaps I could ask a question. You talked about clarification on the previous part, per annum, annual to per contest. Is that something you agree with but just want to make sure it's clear in the bill? Is that what your question is?

[Craig Scott, NDP, Toronto—Danforth, ON]

At the moment I have no particular position on it, but I think I'm in agreement. I just don't think it's clear.

Do I have one minute?

[The Chair, Conservative, Joe Preston]

You have about 20 seconds.

[Craig Scott, NDP, Toronto—Danforth, ON]

On the exceptions, and maybe you could come to this in answering another question, one of those exceptions is the “subject of a binding agreement to pay”. I'm wondering if that's an ability for new loan agreements to constantly be made and kicked forward forever into the future. I really don't understand the difference between that and a loan.

[The Chair, Conservative, Joe Preston]

Thank you.

Mr. Albrecht, you have four minutes. We'll see if we can get some of these unanswered questions answered during your time.

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

Thank you, Mr. Chair.

I want to go back to the same issue. I'm not a lawyer, so I'm as confused as the rest of us around the table. Clause 34 clearly says: Loans made before the coming into force of this Act continue to be subject to the Canada Elections Act as it read immediately before the coming into force of this Act.

In the book we were given, on page 105, it explains clause 34. It clearly says:

The Bill provides that the new rules on loans only apply to loans that were made after the coming into force of the Bill. For any loan that predates the coming into force of the Bill, the provisions of the Canada Elections Act that existed immediately before the coming into force of the Bill continue to apply.

Yet in your statement, Minister, you indicated that the annual donation limits—I understand what you're saying there—apply to leadership contestants who continue to be contestants. Your statement refers to leadership contests or contestants. The bill refers to loans.

We are muddying the waters on those two terms. How can someone who had a loan five years ago, even though they continued to be a contestant, have that loan that was taken out five years ago be exempt from the bill when it clearly talks about loans and not contestants?

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

Here's the thing, though. If you were a leadership contestant six years ago and you continue to have a loan that is unpaid, you are still a leadership contestant. That leadership race does not end until that loan is paid off. I think that's the technical difference there.

[The Chair, Conservative, Joe Preston]

I think that's the technical piece we need to get our heads around.

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

Mr. Chair, with all due respect, I think for the average person reading this, that's going to have to be spelled out in the bill much more clearly than it currently is. I find it very confusing to suggest that someone who had a loan back in 2006 and still has $100,000 to pay on it can now suddenly be retroactively subsumed under this new bill and start to collect $1,200 per year from—

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

Yes, the bill itself is not retroactive, but that clause, to be able to pay it per year, would apply to any existing debts. Those debts currently exist, and you're still a leadership contestant while those debts exist because you haven't closed your bank accounts and all that to close that chapter.

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

We could argue, how can you be a contestant if the contest is over?

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

You still owe money.

[The Chair, Conservative, Joe Preston]

This would be a question we could ask of the Chief Electoral Officer next week also, the rules on when a contest is over and when it is not.

Is there anything else, Mr. Albrecht?

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

No, that's fine.

[The Chair, Conservative, Joe Preston]

Okay, great.

I have a Conservative spot that's not taken. Mr. Armstrong, sorry.

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

This is the first time I've known of a contest that's not over once the winner's declared. It's like having the World Series go on for 10, 15, 20 years after the final pitch has been thrown.

[The Chair, Conservative, Joe Preston]

This is a way for the Leafs to win the Stanley Cup.

[Scott Reid, Conservative, Lanark—Frontenac—Lennox and Addington, ON]

In 1968.

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

That said, I do think you're on the right track. I was joking. I think this is fair and I think it solves a problem that most Canadians would have seen as probably unfair.

Moving forward though, there's an expectation that individuals who take out these loans are going to be responsible, they're going to meet their requirements, and they're going to pay them back eventually, with the new rules. There are going to be times when you have rogue candidates, or you're going to have people who just don't pay them back, and don't follow through on their responsibilities. We know there's going to be some punitive action taken toward them by the financial institutions or whoever they owe money to.

What responsibility do the parties and the electoral district associations, EDAs, have when these situations arise where candidates are not responsible?

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

If that debt is unpaid, if the candidate walks away.... A candidate ceases to be a candidate after the election. The EDA continues and so does the party. The EDA, the electoral district association, the riding association, would take on that debt and have reporting requirements to pay back the loan with interest, if it's to a financial institution. If for some reason the riding association ceases to exist, it would go on to the party, and all those responsibilities would be moved on to the party as well.

As for a riding association, most parties go through some type of nomination process, some type of agreement on the candidate, so there's some buy-in from the riding association. Further, the leader of the party would also sign the candidate's nomination papers. Therefore, there's agreement that the person is the candidate, there's a certain amount of trust in the person, and the person will be carrying the party's flag in the election. There's definitely a buy-in from all levels for that candidate.

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

The EDA would have some responsibility as soon as it certifies the candidate. The central party would become responsible at the time when the leader signs the nomination papers. Is that accurate?