Thank you for inviting us to express our opinions on Bill C-54.
The Bloc Québécois supports the principle of the bill, which sets out the guidelines for loans. The bill will ensure compliance with the rapidly evolving rules relating to federal party funding. It will also prevent any shady or downright fraudulent lending from taking place. However, the application of some of the clauses—because, often, the devil is in the details—is problematic.
There are three types of lenders defined in this bill: the individual, with relevant contribution limits; financial institutions, and political parties.
Over the years, financial institutions have developed scales, rules and risk assessment methodology that can be applied to loan applications for an election campaign or a leadership race.
Proposed subsection 405.7(1) is perhaps the provision that is the most problematic for us. It states that a loan that remains unpaid at the end of the time that is provided for repayment is deemed to be a contribution. On the one hand, we feel that the timeframe in the bill is too short to allow for the refund of election expenses by Elections Canada. There is usually an 18-month deadline. However, a candidate who is waiting for a refund from the Chief Electoral Officer in order to pay back a loan must often wait more than 18 months—and this is a common occurrence, irrespective of the party—because it often takes longer than that for Elections Canada to cut the cheque.
The second problem relates to the fact that the loan becomes a contribution. That is not really an issue for parties or individuals, as long as the contribution limits are respected. But it does become a problem for the financial institution, which is deemed to have made a contribution, even though, by law, contributions by financial institutions are prohibited. So, a loan that was granted in good faith, according to the law, becomes a contribution and an institution ends up breaking the law because the loan that was granted in good faith, with good intent, becomes a contribution. Moreover, any illegal contribution must be remitted to the Chief Electoral Officer, who then remits it to the Receiver General for Canada.
Would a financial institution that granted a loan and that finds itself on the wrong side of the law because the loan becomes a contribution after 18 months remit an amount equal to that of the initial loan to Elections Canada, which will then remit it to the Receiver General, and forego any possibility of recovering the debt? It makes no sense to me.
Proposed subsection 405.7(5), on page 5 of the bill, states that if the candidate is unable to pay, then the party becomes liable for the unpaid amount as if the party had guaranteed the loan. Even though neither the association nor the party were involved in the negotiations for the loan, which only involve the individual borrower and the lender, even though they were not a party to the agreement, if the debt is not repaid, they will nevertheless be liable, as if they had guaranteed the loan. It would be like me telling my banker that the committee chairman will cover me if I default on my loan, even though the chairman was in no way involved in the original transaction.
Our solution would be to delete subsection 5, which ties the party or the association to the contribution. I repeat that if the contribution comes from a financial institution, even if the party becomes the guarantor, it is still illegal.
Thank you.