Bill C-29 (Historical)

An Act to amend the Canada Elections Act (accountability with respect to 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.

Canada Elections Act

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Mr. Speaker, I am pleased to rise in the House to address the report stage amendments to the bill that would amend the Canada Elections Act regarding accountability with respect to loans.

As my hon. colleagues have already talked about, this is a moot point because it is very explicit under the law that is currently in place. Details of loans, including the amount of every loan, the name of every lender and every guarantee must already be publicized and disclosed.

What we want to know is the purpose of these changes or regression that the Conservatives want. May I say from the outset that it is in the interest of all Canadians to ensure that the federal government is accountable because we were sent here by the people to be accountable.

I am an accountant by trade. I was elected by the people of Don Valley East as their federal representative because they wanted someone deeply concerned about transparency and accountability. We are wondering about the need of some aspects in the proposed legislation. The committee looked at it and had made recommendations. Some things are very important that we need the committee's democratic process to run with.

When we look at some of the initiatives that were launched by the previous Liberal governments in 1993 and 2006, they were initiatives that made government more accountable and the whole process more transparent. We introduced the office of the Ethics Commissioner. The Ethics Commissioner is an important element that we need because we have to refer matters to him. We fostered the development to make the ethics officer independent from the Prime Minister's Office, which is important because the ethics officer is accountable to Parliament.

It was the Liberal government that also established a separate Senate ethics commissioner and it was the Liberal government that first established clear guidelines for public office holders. Furthermore, it was the Liberal government that restored the comptroller general function at each department and subsequently instituted an internal audit department. Being a person who comes from that environment, I think it is very important that we instituted those checks and balances.

What does the bill attempt to do? The bill attempts to build on the changes that were proposed by the committee. They attempt to build on the reforms that were originally introduced by the Liberal government, for example, electoral reform.

It was under the Liberal government that we introduced Bill C-24, which was a dramatic reform of political financing in Canadian history and it passed the strictest limits on the amounts of money that private companies and trade unions could contribute to a party or a candidate. Through the same bill, it was the Liberal government that first introduced public funding for political parties, an innovation that made political parties far less reliant on corporate or union financing.

Those types of transparencies have been introduced. The barriers that people had, the barriers to transparency were eliminated by bringing in those type of reforms.

We in the Liberal Party support the efforts to increase transparency and accountability in the electoral process and that is why the Liberal leadership candidates of the Liberal Party went beyond the requirements set out by Elections Canada in reporting loans to its campaigns.

In stark contrast, the Prime Minister still refuses to disclose the names of those who donated to his leadership campaign in 2002. How can the Prime Minister and his party sit there and talk about accountability when the Prime Minister himself thumbs his nose at accountability? How does his non-disclosure represent transparency? The Prime Minister has a litany of broken promises.

It is clear that the Prime Minister believed in an elected Senate. What is the first thing he does? He arrives in Ottawa and appoints his campaign manager to the Senate and makes him the Minister of Public Works. That is not transparency. That is deceitfulness and that is not the way transparency works. In fact, he makes a farce of transparency by thumbing his nose to Canadians and telling them to do what he says but then does the opposite of what he says.

Michael Fortier, the minister of the largest department in the federal government, is not accountable to this House. This is the House to which he should be accountable, but he is an unelected minister. Does the Prime Minister have two sets of accountability, one for his friends and himself and the other for the rest of Canadians?

We looked at this issue of loans. If the Conservative coffers are filled and they supply money to their own candidates, women, who will be the least able to go to the banks and get loans, will be the most marginalized. Is that what the Conservatives are looking for or are they looking to ensure that minorities do not come into government? What is their purpose? What is their hidden agenda?

When we look at the election platform of the Conservative government, at page 9 it states:

A Conservative government will:

Ensure that all Officers of Parliament are appointed through consultation with all parties in the House of Commons and...not just named by the Prime Minister.

What is the first thing the Prime Minister does? He turns around and arbitrarily appoints a loyal Reform Party member as head of the federal appointment process with absolutely no consultation with Parliament. That is not the way accountability and transparency works.

We have heard in this House numerous misdeeds that have been done by the Conservatives. We sit here and ask ourselves how anyone can even trust them. Canadians do not believe a word the Conservatives are saying.

It appears that the Prime Minister is standing up for his closest friends. He appoints unelected members as ministers, appoints his close friends and then basically thumbs his nose at every piece of legislation that deals with accountability and transparency. This is precisely the type of behaviour that fuels public mistrust of government institutions.

If the Prime Minister is concerned about accountability and transparency, when will he disclose who donated to his leadership campaign? Would this bill make him do that? We already have a bill that asks for it and he thumbs his nose at us. By changing the bill, what is he trying to? Is he trying to pretend that he has brought about some sort of transparency and accountability?

We have heard of ministers being mired in conflict of interest, in interference and in all sorts of farces. That is the type of accountability we do not need. We do not need a lesson in transparency and accountability from the government.

The Liberal Party is prepared to support a bill that was amended by the committee. This is how democratic systems work. We are living in a democracy, not an autocracy. We need to understand the reasons for the Conservatives being so gung-ho in trying to bring about regressive changes. Is it to their advantage? Do they want no minorities, no women? What is it that they want?

We will be placing this legislation under close scrutiny to salvage genuine reforms. We do not want these nonsensical reforms, this deceitful double-talk that has been coming from the Conservative benches. We want better accountability but it will be done through a democratic process at the committee level, not by bullying tactics.

[James Moore, Conservative, Parliamentary Secretary to the Minister of Public Works and Government Services and for the Pacific Gateway and the Vancouver-Whistler Olympics]

Mr. Speaker, I appreciated the speech from my friend from Don Valley on this important legislation. I think we can, as usual, make our case for or against legislation without personal attacks or judging people's motives in the way that we just heard.

The member asked whether the Conservatives wanted any minorities or women to be members of Parliament. The first ever female cabinet minister was a Conservative. The first female prime minister was a Conservative. The first Chinese Canadian member of Parliament was a Conservative. After the next election in New Westminster—Coquitlam, the first Korean Canadian member of Parliament will be Conservative. We can leave that out of the debate and still make our arguments.

However, she did make two points that I want to respond to and invite her to respond to my response.

She said that we agreed that we would have appointments made after consultation with Parliament. She said that the head of the Public Appointments Commission, who we put forward, was a Reformer and that the person was appointed and should not have been because the person was a Reformer. I believe she was talking about Gwyn Morgan. Gwyn Morgan, who donated twice as much money to the Liberal Party as to the Conservative Party, is the example that she gave. Of course, the appointment of Gwyn Morgan was defeated at the government operations committee and, therefore, he was not appointed to the position for which the Prime Minister had suggested. We did in fact listen to Parliament, so that part of her speech does fall flat.

She did spend a long time criticizing the minister for the portfolio for which I am responsible, the Minister of Public Works. She said that it was unacceptable that we have a minister who is not elected in this House. The leader of the Liberal Party was appointed to cabinet while he was unelected. Was that inappropriate? Was Jean Chrétien wrong to appoint the current leader of the Liberal Party to cabinet without him first running in an election?

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Mr. Speaker, women were able to participate because there were no Draconian measures. I think he missed my question to the previous member where I said that the current legislation demands that loans be publicly disclosed, including the amount of every loan and the name of every lender and guarantor. The only person who has not disclosed that is the Prime Minister.

In addition, the current legislation also states that loans cannot be used to avoid donation limits.

When loans were in place, processes were in place that women could access funding. He missed the point quite clearly that women have a problem accessing funding. The Standing Committee on the Status of Women has been looking at women's participation and found that they cannot access funding and, if they do access funding, it is to their detriment because the bank wants guarantors.

What is wrong with the current system that allows these women to get their loans from individuals, from family or from friends? That is the process that was available to allow women to participate. I am glad I was in the process to participate.

When the member makes statements, he should look at what has been done before. The rules were not regressive and, therefore, women could participate.

In terms of Michael Fortier, the bottom line is that he is an unelected member. The leader of the current opposition party was a member in the House. If the member gets his facts wrong, I am sorry but that is the problem with them. They keep getting their facts wrong and whatever they say they think is right. However, the facts speak for themselves.

[Colin Carrie, Conservative, Parliamentary Secretary to the Minister of Industry]

Mr. Speaker, after listening to the member, I realize that she, quite clearly, does not understand the purpose of the bill and obviously does not understand the concept of accountability. She asked over and over what the purpose of the bill was. Obviously, as a Liberal, she does not understand because the purpose of the bill is to stop circumventing the law.

The law reads that $1,100 is supposed to be the limit, and certain people take advantage of that. I have some figures in front of me. I believe a gentleman by the name of Mr. Kennedy, who ran for the leadership of the Liberal Party, has loans of over $200,000. Another one is Mr. Rae who has $845,000 in loans.

I want to explain to the member that the reason for the law is so all people can get elected. Right now the only people who can get elected are people who know wealthy people who can donate to their campaign. I want to know why she has a problem with this $1,100 limit? Why does she not want all Canadians to be equal, not just Canadians who have wealthy friends who could be elected to high positions? What is her problem with equality for all people who want to get elected?

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Mr. Speaker, the hon. member should read what he is talking about. It was Bill C-2 that restricted the $1,100. This is Bill C-54, which deals with loans. Perhaps he is going to be talking about the member in his own caucus who took $30,000 from his company. I think the member should figure out what he is talking about before asking questions.

[Meili Faille, Bloc, Vaudreuil—Soulanges, QC]

Mr. Speaker, I am pleased to join my colleagues in speaking to this bill in the House.

The Bloc Québécois will vote in favour of Bill C-29. The Bloc is in favour of a bill that would prevent people from bypassing campaign financing rules. Our position has not changed, unlike what the government is trying to do by introducing its three motions that are on the order paper.

Last session, this bill was called Bill C-54. I say that for the benefit of those listening and watching at home. The government simply introduced a new version containing the amendments made in committee, amendments that were adopted, by the way.

This bill is necessary to close some loopholes in the Federal Accountability Act, Bill C-2, which the government wanted to rush through. We believe that it is necessary to regulate loans in order to prevent financing limits from being circumvented. Contributions to political parties from individuals are limited to $1,100, and contributions from unions or businesses are no longer allowed. These contributions are close to zero. So, an individual can contribute up to $1,100 to a political party, and businesses and unions are not allowed to finance a political party. Examples were given in the May 9, 2007 Ottawa Citizen. This is one of the sources that reported on this problem. It provided examples of expenses and looked at whether or not they were permitted under the Federal Accountability Act.

The Liberal Party of Canada allowed candidates, including Bob Rae and the current Leader of the Opposition to take out loans of around $705,000 and $655,000, respectively. We also saw that creditors made loans of $25,000, $50,000, $100,000 or $150,000.

It was clear that the candidates for leadership of the Liberal Party had found a way to fund their campaigns without relying on grassroots funding. We want this ceiling. These contribution limits are the result of a battle the Bloc Québécois has fought since it has been here. These limits were set several years ago, and we will do everything in our power in this House to make sure no one circumvents the law. We will not support regulations that would amount to backsliding. We want grassroots funding and limits on individual contributions, as we have had in Quebec for 30 years.

The content of the bill is fairly simple. The bill would establish a uniform, transparent disclosure system for all loans to political entities, including mandatory disclosure of terms. People would therefore have the right to know the identity of all lenders and loan guarantors. The bill provides that only financial institutions, at a commercial interest rate, or political entities would be authorized to make loans of more than $1,100.

The rules that apply to unpaid loans would be tightened so that candidates could not shirk their obligations.

Riding associations—or the party itself, when there are no associations—would become liable for loans candidates did not repay.

We are currently examining a request by the government concerning how candidates' unpaid loans would be treated.

In its current form, the bill provides that loans that were not repaid after 18 months would be considered political contributions.

This brings me to the three motions on the order paper, and I will explain the position of the Bloc Québécois on each one. The three motions are amendments to the bill. We have problems with two of them. The third does not present a problem because it makes clarifications that are in line with the amendment tabled in committee.

The problem with the first motion is that the government wants to limit contributions to a given candidate to $1,000 for the entire leadership race. We would prefer that each $1,000 donation from an individual be made according to existing rules governing political contributions, that is, on the basis of a fiscal year. That way, if a leadership race were to take place over two fiscal years, a total of $2,000 could be donated. We are therefore against the government's amendment.

We think that the amendment proposed in committee is logical because the contribution limits in the Elections Act are annual. This would provide for a contribution system identical to that for individuals. We do not want two different kinds of funding for two different kinds of elections, whether for a leadership race or a general election.

The second amendment, the one we agree with based on our analysis, is the one about deadlines. Earlier, I said that the bill proposed an 18-month deadline for paying back a loan. Here, the government is proposing much more precise wording, and we have no problem with that. For a nomination contestant, the three-year period would apply as of the selection date; for a leadership candidate, it would be three years after the end of the race; and for a political party, it would be three years after the end of the fiscal year. What the government is asking for here is quite reasonable.

We do have a problem with the motion that proposes rejecting all of the Bloc Québécois amendments. This is very straightforward. The government wants to make political parties responsible for debts contracted by their candidates. We oppose that proposal. We think it is illogical to try to force a political party to take on its candidates' debts when the political party has no way to limit a candidate's expenditures. The example given was a simple one. A political party cannot currently do anything to prevent a candidate from taking out a $60,000 loan. In a case like that, the government's motion would be unreasonable.

The government motion allows an individual to borrow an unlimited amount in the name of a separate entity. To illustrate this, it is as though I were to borrow a large sum of money and when it came time to pay it back and I was unable to do so, I said it was up to my neighbour to pay it back, even though he knew nothing about the loan. We think this is nonsense and we would like to keep the bill the way it is concerning that particular clause.

I see I have one minute left. In conclusion, here is our problem with the last motion. In committee, the government introduced the Bloc Québécois' amendment. It was in favour of doing things the way we had proposed. Now, though, after reviewing the bill in committee, it has changed its position. That is another reason why we will oppose this amendment, although we are in favour of the bill.

The Conservative Party has had many problems these last few days. This whole issue of transparency and ethics has to go beyond mere slogans.

[The Deputy Speaker, Bill Blaikie]

Before we proceed to questions and comments, it is my duty pursuant to Standing Order 38 to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Cape Breton—Canso, Veterans Affairs; the hon. member for Malpeque, Canada Post.

[Roy Cullen, Liberal, Etobicoke North, ON]

Mr. Speaker, I am happy to speak to Bill C-29, An Act to amend the Canada Elections Act (accountability with respect to loans).

Certainly the party on this side supports transparency and accountability with respect to election financing and the Canada Elections Act. At committee, I understand, there were amendments made. That is why the caucus on this side will support the bill, with the amendments, but I gather the government will be challenging some of those amendments. That would be unfortunate. We will have to see where that takes us.

The other thing I need to say in regard to the bill is that although it is being presented by the Conservative Party as some new and revolutionary way of proceeding with this type of arrangement with respect to loans to candidates, et cetera, many aspects of the bill are in fact similar to what is already in force and what was in force under the leadership of our Liberal government.

Having said that, I think the bill makes things clearer in some areas. In that sense perhaps it is an improvement, but I do not think Canadians will be deceived by the fact that many of the provisions outlined in the bill are already in the law.

Perhaps I should step back a bit. As I understand it, what the bill is trying to deal with is the fact of a candidate running in a federal election, for example, where the rules are very strict--and so they should be--with respect to how people can accept donations or from whom they can accept donations. Those rules are fairly clear.

The intent, as I understand it, is that this bill tries to deal with people who might try to sidestep those rules by receiving loans from parties from whom they otherwise would not be able to receive loans, or by receiving loans at interest rates that are less than fair market value, which itself would constitute a benefit, et cetera.

Or the loan might be advanced during a campaign and then be forgiven. For example, the candidate who had access to the loan money might find that suddenly a year later the person from whom the candidate received the loan is washing his or her hands of it. The candidate might be told that he or she does not have to repay the loan. That would become a contribution. If the amount of the loan exceeds the amounts currently allowed under the Canada Elections Act, then surely the law would also apply to a loan that is forgiven, and surely a lower interest rate loan at less than fair market value would also constitute a benefit.

I think it is a good thing that people are not able to get around the rules or do things through the back door that they cannot do through the front door. To the extent that this bill clarifies those particular aspects, that is a positive development. However, under the existing act, the loans could not be forgiven without consequence, nor could loans be granted under the current provisions of the law if they exceed the donation limits.

This really goes back to our government's Bill C-24, An Act to amend the Canada Elections Act and the Income Tax Act (political financing). Our government began that process and that bill was passed into law. It severely restricted the amounts that could be donated to candidates or parties by corporations and unions, and it also restricted the amounts that could be paid by individuals.

The Conservative government, in Bill C-2, the Federal Accountability Act, has made further changes to that, and in fact reduced the personal contributions from $5,000 to $1,100 per year, per party. What has happened, of course, is that it has made it more difficult for political parties to raise money.

The provisions of Bill C-24 and Bill C-2 allow for Elections Canada to reimburse candidates based on how many votes they received in an election, so essentially what has happened is the burden and the cost of election campaigning has been transferred from corporations, unions, and to some extent individuals, to the taxpayers at large.

One can debate that philosophy. I for one think it is unfortunate that corporations and unions are precluded from participating in the political process. I would agree that limits need to be placed on that, but I wonder why it is so horrible for corporate Canada and the unions to not be able to support financially political parties or candidates of their choice within certain limits.

Nonetheless, Bill C-24 has passed and is the law of Canada, and Bill C-2 makes further changes to that particular regime.

However, I find it strangely ironic that this party brings in this bill, Bill C-29, and argues that it is a whole new regime with respect to loans and elections. As I said earlier, it is not really that new, but at the same time the leader of that party, the Prime Minister, has refused to disclose the names of all the individuals and organizations that donated to his leadership campaign in 2002. That strikes me as being very hypocritical.

Our party went through a leadership campaign a couple of years ago. All the participants made full disclosure of the sources of their funding and it is a matter of public record. However, for some reason the leader of the Conservative Party of Canada refuses to disclose the names of those people who donated to his leadership campaign. By refusing to do that, it raises questions about who was behind his leadership bid.

It may raise questions inappropriately because perhaps everything was totally appropriate, but by virtue of the refusal to disclose, it sort of leaves questions in people's minds of who was actually supporting his leadership bid, and whether they had a particular agenda that they were promoting or advancing.

If we have full transparency and disclosure, I think we take away that kind of ambiguity. I for one am in favour of full transparency and accountability.

Under the old rules, if a corporation wanted to donate to my election campaign, that donation would be fully disclosed by Elections Canada. It would be on my website. It would be everywhere.

If the voters of Etobicoke North did not think it was appropriate for me to accept $500 from BASF Canada because they thought I had a hidden agenda and the company was buying my influence about something, then that is a fair debate. I would be happy to have that debate.

Full transparency and accountability are absolute musts. Members of Parliament should be prepared to defend their actions in an election and in the House.

It has sometimes been said that this place is like living in a fish bowl. If people are interested in what we are doing, they can find out exactly what we are doing. If we travel or someone has sponsored our travel, that information is on the public record. The Office of the Ethics Commissioner has a whole variety of reports that are available publicly. I think that is totally appropriate.

People should not be able to take advantage of loopholes in legislation and stay clear of contribution limits by taking loans from people. That is in the current legislation. If Bill C-29 clarifies that, then that would be a positive development.

Our critic has worked hard on this file. A number of positive amendments were made at committee. I hope the government reflects on those amendments and does not try to reverse them because they would improve the bill. With that caveat, I will be supporting the bill when it comes to the House at a later stage.

[Colin Carrie, Conservative, Parliamentary Secretary to the Minister of Industry]

Mr. Speaker, we have to look at the times that we live in. We have just gone through one of the largest scandals in Canada with the sponsorship scandal.

This week the Liberal Party was holding a fundraiser and the sky was the limit. Liberal members were trying to work the loophole that the member was honestly talking about. The public really wants to see the government and all members working together to close as many loopholes as we can.

My colleague wanted to know why the government is doing it like this. The government is acting to ensure that political entities and wealthy interests cannot circumvent the contribution limits. In other words, loans that are made without reasonable expectation of repayment are essentially disguised contributions that could circumvent political financing rules.

The member talked about his own party's leadership campaign. Bob Rae received $845,000 in loans, $200,000 from his own brother. The change in Bill C-29 would ensure that candidates could not write-off unpaid loans after spending the money. Can the member say that he supports this?

[Roy Cullen, Liberal, Etobicoke North, ON]

Mr. Speaker, the fundraiser last night that the member referred to was totally within the rules.

He knows full well that if someone makes a donation and other individuals receive some value in return, there is a certain value ascribed to the goods or services that the individuals are receiving that has a fair market value and the differential is a political donation. When we get into silent auctions, there is a certain value that we derive and I am sure that is being looked at and will be dealt with.

I would like to come back to a point that I failed to mention which came up in the previous discussion and that is the public appointments commission. The Conservative government promised to have a totally non-partisan appointments process. Bill C-2 talked about that. The government set up a public appointments commission and brought in Mr. Gwyn Morgan to sit as chair. Mr. Morgan is an eminent Canadian who may have said things that were not totally appropriate. Nonetheless, the government operations and estimates committee did not want Mr. Morgan as chair.

The committee did not approve of Mr. Morgan, so the government had to find someone else because it is committed to a non-partisan appointments process. Instead of the government saying it gave its best shot, it threw in the towel.

If the government could not get Mr. Morgan then the whole idea of a non-partisan public appointments process would go out the window. That is like a little kid playing on the street and a bigger kid comes along and takes his toy. The game is then over. That is something the government should revisit and bring forward.

I think the member realizes that the bill deals with loans and that is what this issue is all about. Members on this side of the House will comply with all legislation this House passes, so I do not see any problem there at all.

[John McKay, Liberal, Scarborough—Guildwood, ON]

Mr. Speaker, I wonder whether the hon. member would comment on the overall direction in which we find ourselves. We have eliminated the possibility of raising money from corporations. We have eliminated the possibility of raising money from unions. We have limited the ability to raise money from individuals to a little over $1,000 on an annual basis.

Now people, particularly in leadership positions, are facing having to raise money through loans et cetera, so they are now further restricted on their ability to raise loans. Let us add the fact that campaigns are funded by the taxpayers in a substantial manner.

We get all this essential silliness, spending all kinds of time fundraising instead of doing what the Canadian people hired us to do, which is to be legislators.

Is this just one more level of silliness that gets added on to the previous amounts of silliness that exist in this relationship between fundraising and legislation?

[Roy Cullen, Liberal, Etobicoke North, ON]

Mr. Speaker, my colleague from Scarborough—Guildwood raises a very good point.

The reason people have to get into huge loans if they are running for the leadership, for example, is that they have to raise, in many instances, $300,000, $400,000, or $500,000. They have a limited timeframe so they raise loans to finance their campaign.

I am all in favour of transparency. It seems to me transparency is the direction in which we should be going, and accountability and sanctions if someone breaks the rules.

However, the Conservatives have a whole range of regulations to basically restrict people. Some candidates would like to run for public office but feel constrained because of all these rules. I tend to agree with the member that we may not be moving in the right direction.

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

Mr. Speaker, the previous speaker mentioned that everything was okay with the fundraising initiative that was scheduled for last evening. I was wondering then why the event was cancelled, and further to that, during the hon. member's speech he said, or at least changed.

[John McKay, Liberal, Scarborough—Guildwood, ON]

You were not there? I missed it.

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

I would have been welcome.

He indicated that under the previous regime, loans could not be forgiven without consequence. I was wondering if he could outline for the House what the consequences would be for someone like Mr. Rae, who has a loan of $845,000.