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

[Marc Lemay, Bloc, Abitibi—Témiscamingue, QC]

Mr. Speaker, my hon. colleague's question is an insightful one.

It is obvious that there is a problem. That is why I am saying that individual candidates should be responsible for the expenses they incur during an election campaign. There is one word all of us in this House must remember and that is transparency.

We should never be afraid of expenses incurred in an election campaign. More importantly, we should never be afraid to answer questions designed to determine whether or not our election expenses were permissible and, more importantly, legally permitted, which does not seem to be the case here.

The poor woman must be on the verge of losing her job. We know of others who have been removed by the Conservative government.

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

Mr. Speaker, I am very pleased to rise on the topic of Bill C-29, An Act to amend the Canada Elections Act.

I know that many members of this House have worked hard on improving this bill at the committee stage and I certainly know that we all appreciate their hard work.

Let me begin by pointing out that many parts of this bill are based on recommendations made by the Chief Electoral Officer in his report to the House of Commons Standing Committee on Procedure and House Affairs.

In the report, the Chief Electoral Officer found that when loans are given to a political candidate by a person who is not regularly in the business of lending money, it could be perceived by some as a means to influence the political process with money.

As we in this House know, even the perception of influence peddling can be just as damaging to Canadians' views of the political process as unabashed influence peddling.

Some of the recommendations made in his report include ensuring that all loans from lending institutions be granted to a candidate at the going commercial rate. Another of his recommendations was to establish a limit on loans made by individuals that would be equal to their annual political contribution amount. For 2007 that amount was $1,100. Both of these recommendations found their way into the bill.

Now, corporations and unions would be prevented from making loans to political candidates and parties, just as they have been prevented from making campaign contributions. Individuals would be limited in the sum total of their contributions and loans for a given year. Both a loan and a contribution would now count toward their maximum annual limit.

Another important recommendation made by the Chief Electoral Officer was that the information surrounding any loans be made public in order to mitigate the chances of a perceived conflict of interest. According to the report, the information to be disclosed should include the identity of the lender, interest rates, and a repayment schedule for the loan.

I was pleased to see that during the Liberal Party's last leadership race, our candidates went above and beyond the call of duty to disclose this type of information. I believe it is an excellent idea that the other parties in this House be brought under the same type of scrutiny. There are still some people in this House, not least and most specifically the Prime Minister, who have not revealed the names of the people and organizations which contributed to his leadership campaign in 2002. This kind of secrecy is what leads many Canadians to become distrustful of the political process.

I encourage my colleagues on the Conservative side of the House to urge their leader to disclose those contributions as soon as possible. It could be a good subject to raise in this week's caucus two days from now.

I would now like to provide some background that will illustrate how we have arrived at the current set of laws governing political financing in this country.

The Liberal Party in fact has been at the forefront of the movement toward a more open and transparent process for political donations.

In 2003 the previous Liberal government introduced the first annual limits on individual contributions to a political party and/or candidate. In that same bill, it also limited contributions from corporations and unions to political parties. These changes stand today as the most significant ones that have been made to political financing laws in decades.

I was happy to support these changes in 2003 and I am happy to support Bill C-29 today, providing that the amendments made at committee are kept in place.

There is a danger that sometimes in our zeal to make things better we actually make things worse through a variety of unintended consequences. That is why I am glad to see that the Standing Committee on Procedure and House Affairs made some very well-intentioned and sensible amendments to Bill C-29 during its review of the bill this past December. The government itself brought forward some of these amendments.

Principally, they altered the bill to ensure that if a person makes a $1,100 loan to a candidate in a given year, say 2008, and that candidate repays the loan in that same year, then the donor would be able to make another $1,100 loan without going over his or her annual contribution limit. I think this was supported by all parties at committee stage.

There were some amendments which the government did not agree with, which I understand we will be voting on again here at report stage.

One such amendment has to do with who is liable for loans that go unpaid. The NDP, Bloc and Liberal members of the Standing Committee on Procedure and House Affairs were concerned that the wording of the original bill could have made political parties responsible for loans that their candidates took without even knowing that their candidates had secured them.

If, for instance, a candidate were to take out a $20,000 loan without informing the central party that he or she had done so, the candidate could conceivably then declare bankruptcy after the election, forcing the registered political party to assume liability for the loan, despite the fact that the party had not authorized, approved, or even been aware of the loan in the first place.

For the parties that have representation in the House, this would certainly be an irritant, but it would by no means be catastrophic for them. The parties that this would really hurt are the ones not represented in the House, such as the Green Party and others like it, that field candidates in all regions of the country. For those parties, the possibility of assuming responsibility for a series of loans that their central parties were not even aware of would be extremely damaging to their future viability, and this of course would not be good for democracy.

A third amendment, which the government has tabled a motion to remove from the bill, has to do with loans to candidates when the campaign stretches across the January 1 new year.

Originally the bill only allowed for a single loan to a candidate during the course of the campaign valued at the maximum annual contribution limit. At committee stage it was agreed that should a campaign cross the new year divide, another loan could be made up to the annual contribution limit by an individual in the second year. I do not think I need to illustrate that. It is a clear point and I cannot see the problem the government has with that. We very recently had an election that spanned across the new year, and I think this is a sensible amendment. It is also important for all of our parties' future leadership races which might often run from one year into the next.

Without this amendment, a person who lends $1,100 to a candidate in December would be able to make a similar size donation to that candidate come January, but he would not be able to enter into a second loan agreement.

While this may seem like a trivial amendment to my colleagues over on that side of the House, I would suggest it is a common sense amendment, and I hope they will consider keeping it in the bill.

I could not speak to Bill C-29 without mentioning some of the concerns that have been raised in some quarters about the limits imposed by this bill.

First, there has been some concern raised by several financial institutions that this bill would, to a significant degree, give them some control over who has the ability to run for federal office or for leadership of a political party in this country. If a candidate is not able to meet the requirements of his or her bank to secure a loan, then that candidate will be severely handicapped in the early stages of his or her campaign.

I have the sense that banks are not worried so much about actually denying someone a loan in order to run for office. After all, they are professionals and will base their decisions on to whom to lend money on sound financial principles. The problem for them would be an apparent conflict of interest if one or several candidates from a particular party are denied loans while other parties do not seem to have any trouble.

I do not believe that these waters are unnavigable for the banks. I believe that in terms of provincial political loans some provinces already have in place measures similar to this one and the banks appear to have done fine in that respect. It is, however, something that we in the House must be mindful of and continue to monitor as we move forward.

There has also been some concern raised in some circles that this bill would severely disadvantage Canadians who are less well off and yet wish to run for political office. If a candidate has not built up sufficient equity or maintained a strong enough credit rating, he or she will be prevented from securing the loans that might help launch their political careers. I know that the National Women's Liberal Commission made a submission to the procedure and House affairs committee that outlined such a concern.

As I said earlier, I will be supporting Bill C-29 with its current amendments, but I would hope that if in the future it became evident that these types of problems were occurring, the House would be willing to reopen the issue and ensure that the problems were resolved.

[Gary Goodyear, Conservative, Cambridge, ON]

Mr. Speaker, I appreciate that the hon. member congratulated the procedure and House affairs committee for all its work, although I guess in some weird way I should thank the member for all the work because we have been trying to close the holes that the Liberals found to get contributions in very tricky ways. I remember when there were $5,000 dinners and we had to close that loophole. Then there were donations from kids for $5,000 and we had to close that loophole.

The latest one in this act is really a good one. Let us say that a party that we might call the L party had a candidate running for leadership, and let us just call that candidate D. He borrows $800,000 from the bank, which is guaranteed by, let us say, his brother. Then he defaults on that $800,000 loan, making his brother pay it. The banks are happy, but the brother happened to make an $800,000 contribution, which is completely against the intent of the law. There are a number of members on that side, most of them sitting on the frontbench, who did exactly that.

I would like to ask the member if he intends to endorse that kind of a policy, or is the member actually going to encourage members of his party to follow the law's intent and stop making the procedure and House affairs committee work so hard?

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

Mr. Speaker, it seems to me this mysterious person that the hon. member was referring to is perhaps the member for Mississauga—Streetsville. Some of the characteristics he described may fit that case. I am not sure if that is true, but it was a rather mysterious person he was describing.

The other point I would make, however, is that the member, as a member of the committee, has a bit of nerve to stand in his place and make criticisms of others when it is in fact his party which is conducting a reprehensible filibuster in order to get out of the $1 million in and out scandal that his party is facing today.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, I thank the member for his participation in this important bill, which I think all hon. members would like to see move forward, but with the amendments of the committee, not with the kinds of shenanigans that the government is playing.

During the debate, the chief government whip wanted to talk about the so-called in and out scandal. I am pretty sure that most Canadians are not familiar with what exactly happened and the fact that the Chief Electoral Officer initially found the Conservative Party to be in breach of the Canada Elections Act with regard to this activity, which has subsequently been sustained.

I wonder if the member could inform the House and all Canadians about the seriousness of the matter that has been debated in the House.

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

Mr. Speaker, I think all Canadians would agree that it is reprehensible behaviour on the part of any political party to disobey and break the law. This is what Elections Canada has charged with regard to the Conservative Party in terms of $1 million of misspending during the election campaign.

I might add, and this is a point that seems to elude the Conservatives, that no other party in the House or in this country has been charged the way the Conservatives have by Elections Canada. It is only the Conservative Party behaviour that has been criticized.

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

Found in breach.

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

Found in breach. I take that back, Mr. Speaker, found in breach. I will accept that correction.

Only one party, and now my facts are correct, has been found in breach and that party begins with the letter C, the Conservative Party. One cannot help avoid the impression that this is one of the reasons that the Conservative Party is trying to provoke an early election, so that this and many other scandals, such as the one including the finance minister, will be swept under the carpet in the midst of a general election campaign.

[Mario Laframboise, Bloc, Argenteuil—Papineau—Mirabel, QC]

Mr. Speaker, I am happy to speak to Bill C-29, especially since this bill is an Act to amend the Canada Elections Act (accountability with respect to loans).

The Canada Elections Act has come into question in recent weeks. It always makes me smile to hear the Conservatives in the House boasting about how they have amended the Canada Elections Act. It is very disturbing, and that is why, when the Conservatives introduce a bill like this one, we have to look at it once, twice, three times, four times and go through it with a fine-tooth comb.

As we speak, more than 60 Conservative members still have not received their rebate from the Chief Electoral Officer. They are the only members of the House who have not been reimbursed for their election expenses since the last campaign. They will try and tell us that everything is fine, but there is a good reason they decided to filibuster in the Standing Committee on Procedure and House Affairs. They do not want to be asked about the errors and omissions the Chief Electoral Officer has found. More than 60 members have not been reimbursed for their latest election expenses, including two ministers from Quebec: the Minister of Canadian Heritage, Status of Women and Official Languages and the Minister of Transport, Infrastructure and Communities.

When people—citizens, Quebeckers—read or hear things like this in the media, it does not reflect well on the political elite, particularly seeing as the members of the Bloc Québécois have all been reimbursed and have therefore not been reprimanded by the Chief Electoral Officer. We have to protect that reputation because in the previous Parliament, the Liberals marred politicians' reputation far too often.

Now the Conservatives are making the rest of us look bad. That is what comes of being in power, I suppose. They say that it takes absolute power, but often, as some here know, power can make people crazy, and the Conservatives are verging on it. It is coming. It is getting closer. It started with election spending. They tried to cook the books so they could get more money for the next election campaign. They want to get as much money as possible. They understand how it works, and their actions are based on the premise that the more money one has, the more seats one wins. That is the Conservative way of doing things. The more money you accumulate, the better your chances of coming to power.

We in Quebec are proud that in every election since 1993, we have had a majority, and not thanks to money. We spend as much as the law allows, and not a penny more, because we collect our money $5 at a time. That has always been our way of doing things.

I should point out that Canada adopted its political party financing legislation based on Quebec's, which was brought in by René Lévesque, leader of the Parti Québécois and the sovereignty movement for many years, who cleaned house in Quebec. Canada also cleaned house a few years ago, but some Conservatives got caught yet again, even though they just cleaned house. People have to understand that that's what it means to be a federalist—they have to do everything they can to collect money because that is how elections are won.

Of course we saw that with Option Canada. Maybe, at the time of the last referendum in Quebec, they took money to which they were not entitled. We know that an investigation has revealed that millions of dollars were spent, which was not allowed under the Quebec legislation respecting elections and referendums. But what is done is done. Federalists tell us that what is done is done but that it should not happen the next time. Maybe we should ask the UN to oversee the next referendum in Quebec because it is the only way to stop these people who have no qualms about using public funds to try to win an election.

That is why we have Bill C-29 before us, or should I say before us again. There are three motions in amendment. This bill is the reincarnation of Bill C-54, which was amended by the committee in the previous session. Let us not forget that there was a throne speech. In an attempt to improve their image, the Conservatives presented a new Speech from the Throne. Consequently, certain bills had to be reintroduced, and Bill C-29 is the same as former Bill C-54.

The government is bringing forward three motions to try to counter three amendments made by opposition parties in committee in the last session. I will take the time to explain these three motions. For the Bloc Québécois, two of them are totally unacceptable; there is one however—a minor change—that we will support. It has to be understood that one of these motions deals with expenses, that is the amounts that an individual can contribute to a leadership campaign.

Under the current legislation an individual can contribute $1,000 a year to political parties during a leadership campaign. That amount has been changed to $1,100, but in the legislation it is $1,000. We thought that the bill could contain provisions allowing for annual contributions to a leadership race, as the Canada Elections Act does. The Bloc Québécois enjoys stability, but the other parties in this House often change leaders. We want to give them a chance to raise money for changing their leader instead of for running an election campaign. After the next election, few of these leaders will still be here. I can assure you of that. We are giving them a chance to collect $1,000 a year, pursuant to the current legislation, which, as I was saying, allows individuals to contribute $1,100 a year to election campaigns.

The Conservatives have decided that these contributions can be made once every leadership race instead of once a year. All we are asking for is some logic. We have electoral legislation that allows individual contributions of $1,100 a year. An annual contribution to leadership races should be allowed in order to provide more money for self-promotion and avoid using taxpayer dollars at election time.

This will allow candidates to run their race within their party and to show their true colours. They hide because they do not have the money for a party leadership race. Then, the public discovers them once they come into power and they need taxpayer dollars in order to win the election. That is what the Conservatives do: they try to buy their way in with all sorts of tricks. They must be copying the U.S. model, where we see highly publicized campaigns. Instead of letting us get to know the individuals, prefabricated images are projected in lovely ad campaigns. The candidate, or the leader, is not presented, their image is. That is the new way of doing things. In any event, they will be judged during the next election campaign.

The second motion proposes that a loan become a contribution if it has not been repaid after three years. Obviously, the law does not allow any more time. As was mentioned earlier, the limit is $1,100 a year. Clearly, the law allows loans, but when someone lends another person money, that person must repay the loan at some point. As well, people cannot be allowed to do indirectly what they cannot do directly. We cannot say that we need money, but we need more than $1,100, because we do not have enough friends to give us money. This is often what happens in the other parties. Candidates have enough friends to raise the money they need, but their friends do not have enough money, so the candidates lend themselves money. They take money and lend it to themselves. Once the election campaign is over, these loans have to be repaid.

Candidates cannot use their own money to get elected, because that would be too easy. The Conservatives and Liberals have often used this tactic in recent years to try to get elected. They used their own money to fund their election campaigns. But that is not how things work. After three years, the loan must become a contribution. Because the money has not been repaid, it becomes a contribution, and if that contribution exceeds the $1,100 annual limit—for example, if the loan is for $10,000—then it violates the law. We allowed this minor change.

The last motion proposes that the government reject the amendment introduced by the Bloc Québécois. The government wants to make political parties liable for their candidates' debts. Clearly, if a candidate goes to see his banker because he has no money, but the party does have money, the candidate will be able to fund his election campaign. But if the candidate cannot repay his debts, the party will have to do so.

It makes no sense to adopt this bill in its current form. Candidates must have credibility. If they have to borrow to fund a line of credit until the money comes in, then they should borrow against their own personal assets. That is what Bloc Québécois candidates have always done. We find a way to fund our campaigns, and when we do not have enough money, we take out loans, which we sign for and guarantee ourselves, until we raise enough money. The party does not guarantee our loans, we do. In that way, we may—

[The Acting Speaker, Royal Galipeau]

I am sorry but I have to interrupt the member for Argenteuil—Papineau—Mirabel.

The member for Trois-Rivières has the floor.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

Mr. Speaker, I congratulate my colleague on his speech.

I am very troubled by the part of the third motion where the government wants to make the party responsible for debts incurred by its candidates. I find that truly unacceptable. In fact, it is as if I went shopping with my credit card and then asked the party to pay the bill. It seems to me that candidates should have enough self-confidence to invest in their own campaign and believe in their ability to win without a party, which is a highly democratic political organization, having to be responsible for debts incurred by anyone who decides to run in an election.

Why a government would propose such a motion is beyond me.

[Mario Laframboise, Bloc, Argenteuil—Papineau—Mirabel, QC]

Mr. Speaker, my colleague is quite right.

In any event, the law allows us to spend a maximum amount on our campaign. If we wish to exceed the allowable limit, we have to obtain loans from banks and guarantee the repayment of the campaign debt until we find the money through public funding to be in a position to repay the loan.

If we decide that the party will guarantee the debt, that means that everyone who does not have the requisite credibility to obtain support or financing can become candidates. That changes the way of doing things and the selection of candidates.

Personally, I hope we will find a balance. Quebec's rule is as follows: we have to be able to guarantee the debts incurred in our own election campaign. The legislation states that, after three years, the debt becomes a contribution—both guaranteed debts and loans become contributions. If we wish to obey the law, we have to be able to find the necessary money, have a line of credit and provide our own security for the line of credit, since it is our election campaign. If we decide not to, that means that we no longer need the credibility. What does that tell citizens about the candidate? We have to be able to guarantee the expenses of our own campaign election.

[Christian Ouellet, Bloc, Brome—Missisquoi, QC]

Mr. Speaker, the Conservatives introduced this bill claiming that several Liberal candidates, during the last leadership race, took out large loans in order to circumvent the contribution limits.

In this context, would the Conservative motion to ensure that expenses are repaid by the party solve the problems created by the Liberals during the last leadership race?

[Mario Laframboise, Bloc, Argenteuil—Papineau—Mirabel, QC]

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

In response I would say that it will not solve them at all. First of all, if it involves a bank loan, a credit analysis must be conducted. I am therefore much more comfortable with a candidate who has to go to a bank to obtain financing for his expenses. Some contributions could come in later to help reduce his or her campaign debts.

If the bank gets fleeced, it is the bank's problem and Liberal candidates would not be able to do business with the banks during the next election campaign.

The other possibility is that an individual loans a candidate some money. In such cases, that individual cannot be reimbursed. However, according to the amendments, the law would be clear: after three years, that loan would become a contribution. Anyone who contributes more than the $1,000 allowed by law would be in violation of the Elections Act and face penalties, including possible imprisonment.

I prefer the existing system, because the loan will automatically become a contribution. If someone advances $100,000 to a candidate who does not pay that money back, and that person says “no problem” and cancels the debt, that means that after three years, if he or she is not paid back, that amount becomes a contribution to the election campaign, which is no longer lawful. That becomes a violation of the Elections Act, punishable by law, including prosecution.

[Christian Ouellet, Bloc, Brome—Missisquoi, QC]

Mr. Speaker, I have the pleasure of commenting on this bill. I would first like to remind the House that the Bloc Québécois is in favour of this bill. We have been speaking a great deal about the motions, but we agree completely with the substance of the bill. We believe that it is necessary to regulate loans in order to prevent financing limits from being circumvented.

These limits were established after a long debate with the Bloc Québécois, which wanted to put an end to corporate funding and to limit individual contributions, as Quebec did 30 years ago.

I believe that Quebec, in this regard, can truly provide an important and valuable example. We have a problem with the motions, particularly Motion No. 3.

The government wants to make political parties responsible for the debt incurred by their candidates.

My colleagues spoke about this earlier, but I would like to take it one step further. I believe that adopting this motion would lead to some very significant abuses, to the point that a political party could find itself with a great deal of money in its coffers. That could be the case for some political parties, or at least for one we know.

These political parties could tell their candidates to go into debt, that someone or another could lend them some money and that, in any case, three years later, the party would advance the money. They do not need to feel responsible because the party will pay back the money. That means that the candidates would have a millstone around their necks and that they would be chained to their party. They would not have the freedom to say that they felt responsible for their own election campaign because, in any event, the party will pay for them if they do not repay their debt.

These things can be planned. That is why I am saying that things can go farther than my colleagues have acknowledged. People will be able to plan things and borrow money from multiple sources because the party will pay it back in three years. The party has the money.

The Bloc Québécois finds this way of thinking outrageous. We think that candidates have to have a modicum of freedom in their ridings to get themselves elected democratically by their supporters.

We do not dictate who can run for our party. It is important for candidates chosen by their supporters and by people in their ridings to be responsible for their own election campaigns and the money they spend. As a result, our candidates have much closer ties to their communities and are more connected to the voters in their ridings.

We can pretty much eliminate parachuting people into a riding. Parachuting people in is easy. Some people, a week before the election, have never campaigned. This happened in Quebec in the last election, especially with the Conservatives. There were candidates who had never been involved in politics, not at all. At the last minute, the party found some people and told them not to worry because with the three-year legislation, they would not have to pay back the money they borrowed.

Imagine what being told in advance that the debt will be paid off in three years can do to a candidate's accountability. A party can parachute in any candidate at all. The candidate is not accountable and is not even chosen by supporters. We are well aware—experience has shown—that there were candidates who did not even have supporters.

It is much easier for a party to go into a riding and convince people to run if it promises to pay off their debts later.

This motion is truly unacceptable. The government wants to hold the political parties responsible for their candidate's debts. That is unacceptable and I would say it is bordering on immoral. In our capitalist system every individual is responsible for their own debt. Under the new plan, an individual is no longer responsible for his or her debt, but a third party, an entity, in short, a political party is. The party would become responsible for an individual's debt. That makes absolutely no sense.

What is more, five or six lenders could be identified. They could even come from outside the riding and be reimbursed in three years. See how complicated this becomes? The lender would no longer ask for a guarantee. When the Bloc Québécois candidates borrowed money—at one time we needed to do so, but fortunately that is no longer the case since things are going well—they went to the bank and were responsible for the debt. This is fundamental. It gives candidates the chance to be responsible to the electors and to hold their heads high after the election whether they won or not. They do not owe anyone anything and they will settle their debts.

This necessarily forces people to work together, to collaborate and create a much greater sense of belonging within the riding. A candidate has to work with the people who are there to help. This takes many $1,100 contributions and there are not many people who donate that kind of money. In my riding, there are very few people who give $1,100. As my colleague was saying earlier, we collect donations of $5, $10 or $20 and that is what we use for our election campaign. This creates a democratic link with the people in our riding and that is what really counts. If we no longer have that and can borrow $80,000 in one shot—as we saw a candidate do and then switch parties—without paying it back, this becomes institutionalized and there is no longer any need to pay money back because the party will take care of it. That does not make any sense. It is wrong and we cannot accept it.

The first amendment made in committee makes sense to us since all the contribution limits currently in the Canada Elections Act are annual, except in the case of candidates for party leadership. Contributions should be annual and should not be contributions for a leadership campaign. It is a well-known and perfectly correct old habit that every January, in the new year, people can once again give money to the political parties. Why would it not be the same for leadership campaigns, which do last from one year to the next? This would let anyone who wants to support a candidate give again after the year ends. One year is long enough to assume people would be able to give again.

We think that Motion No. 1 is very important and we want to keep it that way. We are not against the idea of the annual contribution, but against the fact that parties would be responsible for contributions that come from personal loans. This could lead to dishonesty. We could end up with such a law in a few years and we could plan out all the loans taken by a candidate. This is completely unacceptable. We are against this motion and will keep voting against it.