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.

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.

Political Loans Accountability Act

[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.