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 Chair, Conservative, Joe Preston]

This is meeting 45 of the Standing Committee on Procedure and House Affairs.

We were to be meeting with Madam O'Brien and the acting law clerk this morning, but due to some health reasons, they are not able to join us today. They will join us on the first Tuesday we are back. We had set aside some committee business for today, so I thought it was still important that we meet and use our time for that. We will move on to that.

Bill C-21 has been referred to our committee. With the committee's permission, I would like to move on it as soon as we can. I would like to get witness lists from each group. Thank you, Mr. Garneau, for already supplying us with yours. Great work. If we could get witness lists from each group for the morning of the first Tuesday we are back, we could start. We will have a quick bit of committee business on that day to discuss how we're moving forward.

Mr. Lukiwski.

Canada Elections Act

[Pierre Poilievre, Conservative, Parliamentary Secretary to the Minister of Transport]

Mr. Speaker, I thank the sponsor of the bill who, I believe, does so with good intention and with a skilled hand as a legislator in this place.

The bill would amend the Canada Elections Act to increase the fines for serious election offences. It would provide that the Chief Electoral Officer could contest an election of a candidate under part 20 of the act.

I think everyone in this place can agree that it is our responsibility as parliamentarians to always look for ways to continue to ensure strong, free and fair elections in Canada. Our electoral system must have the trust and confidence of Canadians. Our Conservative government has a proud record of achievement when it comes to strengthening our democracy, a point which I will return to a few minutes later.

We certainly agree that people who commit election fraud and those who break the law should be held to account with tough penalties, and we certainly do not have a problem with tougher penalties. In fact, we welcome the agreement I think we have here in the House on fines and tougher penalties for serious election offences. That agreement is something I hope we will be able to come back to as this session of Parliament continues this fall.

We probably all agree more generally with some sort of strengthening of the enforcement mechanisms of the Canadian Elections Act as well. However, we believe that changes to the Canada Elections Act should be considered in a broader context than that presented in the bill. Piecemeal amendments such as these do not encompass the broader context of the act.

That context is illustrated by the fact that just earlier this year the procedure and House affairs committee produced its 15th report in response to the Chief Electoral Officer's recommendations following the 40th election. That report contained 50 recommendations to the act, and that was not even a comprehensive review of the act. It was simply a review of issues that came up during that particular election.

One of those 50 recommendations dealt with fines. The government is currently reviewing this recommendation and the report as a whole and will put forward a proposal in due course. Therefore, we will have that issue covered in the future and in a more comprehensive way than this bill can provide for. That is plain to see. This bill has two elements. The procedure committee report has 50, so we are talking about a vast difference in scale. That is the broader context at stake.

However, I will not leave it at that. There is a serious problem with the bill. The bill has only two main elements and one of them is, unfortunately, disqualifying in nature. The problem is that the bill would completely undermine the neutrality and impartiality of the Chief Electoral Officer. The bill must be defeated on these grounds alone, even if there were no others.

Right now, participants in an election are able to contest that election. That means any elector or candidate in the electoral district in question can contest it. The application must be accompanied by a security cost in the amount of $1,000. By inserting the Chief Electoral Officer in the arena, we would be undermining his impartial role. The officer is an independent player who represents Parliament. He is not a participant in an election and must therefore act in a manner that is neutral and impartial to all parties and candidates.

Each actor in an election has his or her role. The officer supervises the conduct of elections, kind of like a referee in a hockey game. He does not pick up a stick and start paying. At least he should not.

All complaints alleging offences to the act are referred to the commissioner of Canada elections. The commissioner investigates and enforces the rules. When the commissioner believes that an offence has been committed, the commissioner may refer the matter to the director of public prosecutions who would decide whether or not the matter should be prosecuted.

While the administration and enforcement is left to others, the contestation of elections is left to the political actors, that is candidates and voters. Once again, the Chief Electoral Officer is kept above this fray.

The Chief Electoral Officer should not be an active player in making an election contested. Otherwise, he or she would be put in a conflicted position of potentially filing a complaint against himself or herself. He or she is, after all, the officiator and any bill that requires him or her to make complaints on how an election is officiated would effectively turn his or her own sword on his or her own person.

As such, no measures should be put in place that would risk giving rise to even the perception of any favouritism on the part of the Chief Electoral Officer. I think we can all agree that any favouritism or bias on the part of the Chief Electoral Officer would bring the officer and Elections Canada as a whole into disrepute. The power to contest elections would create just such a risk. The Chief Electoral Officer would have to pick cases to be brought to court. Invariably, those denied will complain of favouritism, having to bear the cost of litigation, and rightly so.

Furthermore, irregularities that may call an election result into question may have been the result of actions or omissions on the part of the Chief Electoral Officer or Elections Canada staff themselves. Imagine if actions or omissions of the Chief Electoral Officer became the subject of a potentially contested vote, and then imagine we had a legal regime that required that same electoral officer to file a complaint against himself or herself. The conflict is obvious and inescapable.

We saw this was the case in the contested election of Etobicoke Centre. In such a case, the Chief Electoral Officer would find himself or herself in a conflict of interest were he or she called upon to defend the actions of his or her staff while at the same time initiating the complaint against the process that he or she ran. So it is clear that the bill would put the Chief Electoral Officer in an intolerable position of conflict. As such, this proposal alone renders the bill unsupportable by the government. Thankfully, we are taking other actions and we hope to co-operate with the hon. member for Beauséjour and the opposition in order to see them to a successful conclusion.

Last night, Bill C-21, the political loans accountability act, passed at second reading in the House. The bill would fix the current rules for political loans, which have been made a mockery of by the opposition parties. Six of the nine NDP contestants in the recent leadership contest failed to meet their filing deadlines for disclosure. They claimed software glitches or having to attend a conference. They had six full months to get their books in order but they could not meet a generous reporting deadline.

The Liberal Party's record is worse. Four Liberal candidates from the 2006 Liberal leadership race, six years ago, have still not paid off their debts despite very generous extensions to the deadline. We are moving to tackle this problem and these abuses through the political loans accountability act.

Finally, we are moving forward with Bill C-377, which would require disclosure of union finances, this being extremely important after the recent discovery that the unions gave $340,000 in illegal money to the NDP.

I encourage the opposition parties to work with us to expand accountability and strengthen the democracy that we all enjoy.

The House resumed from September 28 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

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

Mr. Speaker, I am pleased to rise to speak to Bill C-21 which, for reasons I will explain in a moment, the Liberals will oppose.

The bill does a number of things. It amends the Canada Elections Act in the following ways: All loans to political entities, including mandatory disclosure of terms and the identity of all lenders and loan guarantees, must be uniform and transparent. We are fine with that. Unions and corporations are prohibited from making loans to political parties, associations, or candidates. That is fine. Limiting the amount of loans and loan guarantees that individuals can make within the framework of the permitted individual annual contribution is also fine. Limiting the ability of financial institutions and political entities to make loans beyond the annual contribution limit for individuals and only at commercial rates of interest is the part we do not agree with. Finally, there are tighter rules for the treatment of unpaid loans to ensure candidates cannot walk away from unpaid loans.

The Liberal caucus certainly is in favour of full transparency and disclosure of political loans. We are also in favour of forcing those loans to bear commercial interest rates.

What is a problem for us is when the bill says that only financial institutions or banks will have the authority to make these loans.

Before entering politics, 12 years ago, I worked for the Royal Bank. So I am well aware of how banks work. In my view, it is not the banks that asked for this exclusive authority, but rather the government that wants to give it to them. This puts too much power into the hands of the banks. Basically, the banks would have the authority to make political choices by lending money to the candidate they like the most and by not giving a loan to a candidate they do not like. I am not saying that that is what they would do, but all the same, it gives excessive power to the financial institutions.

Furthermore, with these rules, the candidates with more money, the candidates who are wealthier, would have an advantage, because they would have a better credit rating than candidates who are not as wealthy. This kind of system would favour the rich rather than treating everyone fairly. The system might also be unfavourable to women, especially to those who are going back into the labour market after a number of years at home. They might be less able to borrow money from a bank because they would not have as much money.

For all of these reasons, the Liberals will be voting against this bill.

I want to emphasize that it is only the exclusive aspect of the banks being the only lenders that we object to. We are entirely in favour of total transparency, total disclosure, the requirement to pay commercial interest rates, and so on.

In closing, I would remind the House that the Prime Minister has not, to this day, disclosed any of the names of the people who contributed to his leadership campaign, let alone the sums involved, let alone whether he borrowed any money. I would say that what is sauce for the goose should be sauce for the gander. I would suggest that as the government is moving forward with this law, now would be a good time for the Prime Minister to disclose at least the names of his donors, if not the amounts.

Perhaps during questions and comments one of the Conservatives could give their view on the proposition I just put forward.

[Annick Papillon, NDP, Québec, QC]

Mr. Speaker, I thank my colleague for bringing up this important point.

We can never repeat it enough: the NDP made a historic achievement when 40% of its elected candidates were women; no other party has ever achieved such a record. I believe we can congratulate ourselves, because it is fantastic. I thank my colleague for bringing it up. Women's rights are important. This is a point we have also raised when discussing other bills, which shows how strongly we support it.

Bill C-21 really aims to eliminate the influence of the richest participants in politics, so that one candidate is not favoured over another, or a female candidate is not favoured over a male one. This is a very important objective, in my eyes. The goal is not to favour one party or one group over another.

This is what we will need to discuss in depth when the committee studies this bill, to ensure there is no favouritism and all candidates have an equal chance. I believe it is important, and it also speaks to what democracy is all about. I know everyone on this side of the House shares this idea with deep conviction.

[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.

[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, 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.

[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.

[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.

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.

[Charmaine Borg, NDP, Terrebonne—Blainville, QC]

Mr. Speaker, I am pleased to rise in the House today to speak to Bill C-21. I will start by saying that we will support this bill at second reading. I know it is rare for us to support a bill, but it is also rare for us to be able to examine an individual bill that is not part of a big omnibus bill. I ask the Conservatives to take that into consideration.

This bill prohibits corporations and businesses from granting loans to political entities. “Political entities” refers to political parties, associations, leadership candidates or candidates for nomination. Furthermore, this bill sets a time limit for paying back loans taken out by political entities: three years for leadership candidates, four months for a leadership candidate and three years for an association or party.

It is important to set limits on repaying loans. Otherwise, debts could accumulate indefinitely. Moreover, there is typically interest on these loans, which can be very detrimental to someone who, after running for leader or for election, will unfortunately have a lot of debt for a very long time.

Political parties will be responsible for paying back loans that are not paid back by the candidates themselves. Obviously, it is important for the financial institutions granting these loans to know that someone will be responsible for paying them back.

Another measure that I find very interesting is the measure that will enable leadership candidates to receive gifts up to a maximum amount per year instead of an amount per campaign. If someone is still in debt two years after the leadership campaign and has already asked all of his contacts, friends, family members and supporters to make a maximum donation, he is in trouble because those people cannot give the maximum amount again, which limits candidates' ability to raise funds to pay back loans within the deadline. This is a very interesting measure. I congratulate the government for having thought about this problem and for putting this measure in Bill C-21.

It is very important for us, as parliamentarians, to try to find solutions to the problem of debt incurred by candidates during elections or leadership races. These people end up with huge amounts of debt that they are unable to repay. We know that some of the candidates in our own leadership race still have a little bit of debt. There are also candidates in the leadership races of other parties who unfortunately still have a great deal of debt.

This measure is important for someone who will stand for election because they will know the consequences of ringing up that amount of debt. If they know that they have three years to repay the money, they may think twice about how much money they are going to spend and if they are capable of paying it back. This will also make people who stand for election more accountable.

In 2007, the Chief Electoral Officer released a report on political financing, which contained a number of recommendations. The changes proposed by the Chief Electoral Officer were intended to limit the influence of individuals and corporations on political entities, an influence that can be exercised through financing. Bill C-21 takes these recommendations into account. Once again, I congratulate the government for responding to the Chief Electoral Officer's recommendations. We know that quite often the government does not follow through with recommendations made by various stakeholders.

The changes proposed by Bill C-21 seek to eliminate the influence by the more well-to-do in the political world. If a lobby, corporation or individual with a lot of money can provide a loan to a candidate, the latter may be influenced by the ideas of the group, corporation or individual.

For example, if a group campaigns for a certain cause, the person may feel obligated to advance that cause in particular. I think that it is extremely important to bring back this aspect of democracy and to limit this type of individual or corporate loan. It would be extremely unfair if this could happen. It is thus extremely important that we take action, that we support these measures and that we limit financiers' influence on politics.

As we know, there are groups that may have really good ideas or policies, but they may not be able to provide a loan because of financial difficulties. It is thus important to be able to level the playing field so that people cannot say that certain groups with more money will be listened to but it is tough luck for everyone else.

I am also calling on the government to assess the point that my colleague mentioned in her speech. Some financial institutions may be more inclined than others to give parties loans. This is a cause for concern. I understand that financial institutions are supposed to act in an impartial and non-partisan manner, but one never knows. I think that it is this government's duty to assess the issue in committee in order to determine if there is a way to prevent this phenomenon.

I would like to once again applaud the measures put forward. However, I would just like to point out the fact that it is somewhat contradictory to promote these measures that will improve transparency by trying to limit candidates' debt and yet, at the same time, be prepared to limit the amount of money that political parties receive for each vote.

I see that my time is up. We will certainly be able to get back to this issue later on, Mr. Speaker.

[Nycole Turmel, NDP, Hull—Aylmer, QC]

Mr. Speaker, I thank my colleague for her question.

It is very unfortunate that it has taken a year. We know how the Conservative Party does things. If they really wanted to make Bill C-21 a priority, they could easily have done it. Our party could have had discussions with them, as could all the other opposition parties, and we could have moved it forward and resolved this situation.

[Alexandrine Latendresse, NDP, Louis-Saint-Laurent, QC]

Mr. Speaker, I thank my colleague from Hull—Aylmer for her speech. She is a very brilliant woman who understands the issues perfectly. It is terrific to be able to work with her.

What does she think about the fact that the bill was introduced over a year ago and seems to have fallen into some sort of limbo? We heard no more about it. The Conservatives have tried to ram through a whole pile of other bills any which way, and now they tell us they were simply waiting for everyone to agree.

I would like my colleague to comment on that, and tell us what she thinks about the very long time it took for Bill C-21 to come up for debate.

[Nycole Turmel, NDP, Hull—Aylmer, QC]

Mr. Speaker, I am pleased to share my time with the hon. member for Terrebonne—Blainville.

Bill C-21, Political Loans Accountability Act, contains a series of measures to tighten the political financing rules. Among other things, the bill proposes to prohibit political entities from receiving corporate or union loans. Financial institutions, individuals, political parties and associations will still be authorized to grant or guarantee loans, as long as the terms of the loan, such as the interest rate, are divulged and everything is put down in writing.

As my colleague mentioned, Bill C-21 is a step in the right direction. The bill, to its credit, prevents situations like the one the Liberal Party currently finds itself in from happening again. Let us remember that, six years after the leadership race, many candidates still have not reimbursed the total amount of the loans they received to run their campaigns.

The issue even went before the Supreme Court of Ontario, which recently found the failed candidates with loans in arrears guilty of violating the Canada Elections Act. The court sentenced them to pay a fine of $1,000 or to serve three months in prison. It is important to note that, under Bill C-21, these loans that were not repaid would be considered political contributions after a period of three years.

In the report that he submitted to Parliament in 2007, the Chief Electoral Officer of Canada said:

The loans granted by lenders—who are not in the business of lending, who lend money at non-commercial rates, with terms that are not available to others, or in cases where there is little prospect of reimbursement—may be perceived as a means to influence the political entity to which the funds are provided.

The Chief Electoral Officer highlighted a weakness in our election financing system: lenders might try to influence political entities. That weakness had to be remedied. We have a duty and a responsibility to do everything we can to limit the influence of outsiders over political entities in this country. Bill C-21 proposes a solution worthy of consideration, and that is why, as was noted earlier, we are going to support it at second reading.

Once it is sent to committee, we will be able to improve it. While Bill C-21 means we are taking a step in the right direction, it is still in need of improvement. Yes, we support it, and I hope the Conservative Party will also be open to our solutions. For example, limiting the number of potential lenders is a good idea in theory, but in practice, problems might arise.

Take the case of financial institutions. As the bill now stands, there is nothing that provides for establishing rules that can guarantee a degree of impartiality on the part of the banks in granting loans.

Bill C-21 contains nothing that could guarantee that this process is fair to all candidates, regardless of party. The minister himself said in the past that he did not see the benefit of making the banks subject to a regulatory framework under Bill C-21. That is quite surprising to hear from the minister, because if his objective is to make the process transparent and democratic, it would be to our benefit to see this kind of thing in the bill.

Without clear rules to guarantee that the lending process is fair, we can easily imagine that the banks might be, let us say, more inclined to lend to certain candidates than to others.

That is not to say that this would happen systematically, but the risk of a bank denying a candidate a loan for political reasons exists, and that should never be the case. It is important to address that issue. Without clear rules, we are opening the door to the possibility of a bank denying a loan to a political entity on the grounds that it advocates an agenda the bank considers to be against its interests.

For example, would a bank agree to lend to a political entity that was proposing higher taxes on its profits? Perhaps; it might. The risk of it refusing based on the ideas advocated by the entity in question is our justification for making amendments to the bill. That is exactly the situation that has to be avoided.

Mr. Speaker, you will tell us that the banks are already free to grant or deny a loan to whomever they see fit. Fine. But by limiting the number of entities that are entitled to make loans, Bill C-21 places more power in the hands of the financial institutions. That power must not have an impact on candidates’ ability to finance their campaigns. That would completely defeat the objectives and the intent of the bill.

I hope that the minister and his Conservative colleagues will agree to work with the official opposition to prevent Bill C-21 from creating two classes of candidates: those who have no trouble raising campaign funds because they advocate ideas that will help banks make money, and all the other candidates.

After introducing the bill, the Conservatives issued a news release stating their intent to implement high standards of integrity in the political process. That is all well and good, but the government must work with all parties to ensure that integrity in the political process is achieved.

If that is truly their intention, why did they recently condemn public funding of political parties, which had the advantage of avoiding and eliminating any possibility of allegiance or political scandal?

It seems to me that the best way to curb private money's influence in the political sphere is to remove private money from the equation. Unfortunately, that is not the approach the government chose.

The NDP believes that any action taken to ensure that political funding and loans are as transparent as possible is a very good thing.

That is why, as another colleague said, we will support Bill C-21 at second reading. I sincerely hope that the Conservatives will be open to the changes we propose in committee, even though that has not been our experience in the past, I must say. We all have an interest in guaranteeing the independence of the people's representatives in this country. It is our duty to be above reproach, and we must prevent politicians from using their influence to obtain favours.