Procedure and House Affairs Committee on June 18th, 2007

[Stephen Owen, Liberal, Vancouver Quadra, BC]

Mr. Chair, I have a motion to present with respect to this bill. It's in French and English, and it's being circulated as I speak. It comes, Mr. Chairman, out of the evidence we heard last Thursday with respect to the impact this may have on the borrowing practices of financial institutions. If I may just read it, I think it becomes self-explanatory.

[The Chair, Conservative, Gary Goodyear]

Mr. Owen, if I could just interrupt—I'm sorry, I recognized you very quickly—I just want to make sure the committee knows that I'll attempt to report this bill tomorrow, Tuesday, at 10 a.m.

My apologies, Mr. Owen. Now we're on to your business.

[Stephen Owen, Liberal, Vancouver Quadra, BC]

I think I'll read it, Mr. Chairman, just so it's clear and on the record.

I move that the following report be adopted and that the chair report it to the House:

AIl members of the standing committee agree that the measures contained within Bill C-54 will increase transparency and accountability within the political process and have therefore passed the legislation, as amended, at committee stage. However, members of the committee continue to have serious concerns regarding the implementation of this legislation, specifically regarding the lack of testimony received by our committee on behalf of the Canadian financial services industry, which will be significantly impacted by this legislation. Under this legislation, total loans, loan guarantees, and contributions by individuals could not exceed the annual contribution limit for individuals established in the Federal Accountability Act. Furthermore, only financial institutions, at commercial rates of interest, and other political entities will be entitled to make loans beyond that amount.

Despite efforts by our committee, no representatives from the financial institutions, nor their trade associations, e.g. the Canadian Bankers Association, were able or willing to make submissions regarding the impact this legislation will have on Canadians' access to their democratic system. Will all Canadians have equal access to loans by financial institutions? Obviously, not all candidates for elected office have equal opportunities to win elections. Historically, the Canadian political system has been dominated by a small number of parties at the federal level. Will financial institutions take into account a candidate's relative chance of winning an election, or, perhaps more importantly, their chance of obtaining enough votes to receive a rebate from Elections Canada under the Canada Elections Act before deciding whether or not to extend credit to smaller parties or independent candidates?

Will interest rates be equal for all candidates? Financial institutions make loans based on a number of factors, primarily factors related to their probability of being repaid for the loan. These factors have a tremendous impact on interest rates that are charged for equivalent loans. Will higher interest charges for higher-risk candidates—independents, smaller parties, etc.—become a barrier or a deterrent for Canadians seeking to enter the political system? Are financial institutions prepared to accept these new regulations? Under this bill, individual guarantors for loans are limited to their annual contribution ceiling. Therefore, if a candidate is seeking a $50,000 loan for the running of a federal election campaign, the candidate will have to secure approximately 50 separate supporters, each of whom are willing to guarantee one-fiftieth of the loan being sought. This significantly increases the amount of work and risk for the financial institution issuing the loan.

Will financial institutions now become the gatekeepers of the Canadian political system? Under this legislation, financial institutions are being granted unprecedented access to the democratic process. Their unqualified ability to provide financial resources to candidates seeking federal office will almost give them an effective veto over who can and cannot fight an effective election campaign with the resources necessary to win.

Therefore, this committee recommends, one, that the Minister for Democratic Reform immediately begin consultations with Canada's financial services sector to address the concerns raised in this report and provide the House of Commons with a report of his findings; two, immediately following Canada's next federal general election, the Standing Committee on Procedure and House Affairs study the impact of this legislation on the accessibility to financial resources by candidates for federal office and whether or not this legislation represents a barrier for women candidates, independent candidates, and smaller-party candidates.

That is the report I put forward as a resolution, Mr. Chairman. I think in support of this I might only refer us back to the information we heard from witnesses, both from Equal Voice as well as the representatives from parties.

[The Chair, Conservative, Gary Goodyear]

Thank you very much, Mr. Owen.

We're going to open up debate on the motion. The motion is tabled.

Mr. Lukiwski, Mr. Guimond, Mr. Reid, and then Mr. Hill.

[Tom Lukiwski, Conservative, Regina—Lumsden—Lake Centre, SK]

Thank you, Chair.

I'll be voting against this motion for a couple of pretty basic reasons.

One reason is the wording of the motion, particularly in the second paragraph, where it says that members of the committee continue to have serious concerns regarding implementation of this legislation. There may be some who do, but certainly there are some who don't. So I can't support it based on that.

The other thing is that you're making an assumption here—and I know we've had testimony about this at committee before—on the ability of candidates to raise money and to take out loans. My contention and my experience is that the majority of loans taken out are secured by riding associations, inasmuch as they assign their rebate to the financial institution.

Frankly, I don't know of too many individual candidates who can go under any circumstances and get a $50,000 loan to run a political campaign if their riding association has no money. That in itself is an indication of the relative level of political support within that particular riding. I think that most banks, regardless of what legislation was brought down, would have to be taking a serious look at whether that individual would qualify for a loan. To suggest that it's going to make it more difficult for financial institutions or for candidates because they have to get 50 guarantors—I would suggest that this is going to work itself out, quite frankly.

I think you'd be hard-pressed to find any candidate in any riding who it was apparent didn't have very much political support. It's kind of like the NDP running a candidate in a very strong Bloc Québécois riding. I think it would be very difficult for anyone in that particular situation for the NDP to go in and say “I have no money in the riding association, no organization, so give me $50,000, because I think I have a great shot at winning this election.” It's not going to happen. This is the reality of politics. We all know this. We've all been through this game before.

Based on that, I think the legislation as proposed, and with even some of the amendments the Conservative Party has opposed in the clause-by-clause examination, is still a good piece of legislation. To suggest otherwise would be doing a disservice to a lot of the discussions we've had around this committee table.

Based on those two things alone, I will definitely be opposing this motion. Although I am firmly convinced that Mr. Owen put it forward in all good faith, I just do not agree with many of the terms of this motion.

Thank you, Chair.

[The Chair, Conservative, Gary Goodyear]

Before proceeding with our next speaker, I am going to ask the committee if we have any more need for our expert witnesses. Can I dismiss them and their team?

Seeing none, with the greatest thanks from the committee, we certainly appreciate your coming out twice. We certainly appreciate the team that comes behind you that didn't get an opportunity to be recognized by the chair. I do recognize and thank you all.

You're excused. Thank you very much.

Continuing discussion, Monsieur Guimond.

[Michel Guimond, Bloc, Montmorency—Charlevoix—Haute-Côte-Nord, QC]

I too would like to indicate how worthy I think Mr. Owen's motion is. But I have serious reservations about the two recommendations.

As regards the second recommendation, I wonder if the clerk could enlighten us about its legality. Can our committee impose an agenda on the next Standing Committee on Procedure and House Affairs that will be struck after the next general election? I do not think that we can make commitments on behalf of the next Standing Committee on Procedure and House Affairs.

He is asking, and I quote, that: “2. immediately following Canada's next federal general election, the Standing Committee on Procedure and House Affairs study the impact of this legislation [...]”

We are always told that committees are masters of their own procedure. So I do not think that it is legal to commit the committee after an election, because this committee dies if the House of Commons prorogues or if there is a general election. For me, there are legal concerns if we commit the next committee to doing something.

Secondly, the first recommendation reads as follows: “1. that the Minister for Democratic Reform immediately begins consultations [...]” I think that is our job as a committee. Perhaps when we come back in September, we could ask the chair to write to representatives of financial institutions, who certainly had good reasons not to accept the invitation that we sent them. The chair of the Standing Committee on Procedure and House Affairs could write a letter to representatives of financial institutions to ask them what they think of the bill. There is absolutely no need to ask the minister responsible for democratic reform to do it for us.

For those reasons, therefore, I am not very keen on supporting Mr. Owen's motion.

[The Chair, Conservative, Gary Goodyear]

Before we proceed further, colleagues, our clerk had some knowledge of this motion prior to it being tabled. I was given the impression that it was in order. I am going to rule that it's out of order.

I don't believe we have the ability to tell a future committee what they can do. We can suggest to the committee what they can do. With all due respect, these are good suggestions, by all means, but the motion does include recommendations, and the recommendations are out of order, beyond the scope of this committee.

That's my ruling. Does anyone want to overturn it?

Mr. Owen.

[Stephen Owen, Liberal, Vancouver Quadra, BC]

I wouldn't suggest, in any situation, Mr. Chair, that we would want to overturn your ruling. Let me just say that I accept the comments on it, and of course the clerk's advice.

Perhaps this can just stand as an issue of...both a recommendation or for preventative action with respect to any further discussions this committee might have, or advice from the financial services industry, and as a persuasive way for future committees, following the next election, just in the interests of ensuring that we're not having any unintended consequences.

[The Chair, Conservative, Gary Goodyear]

Okay.

On this note, I'm going to offer two things to the committee.

One, about the banking institutes, a number of them were contacted and they chose not to be here. They were offered the opportunity to submit in writing. We haven't received anything like that.

The second thing I might offer, Mr. Owen, is that if you would want to draft up a letter from this committee suggesting that to future committees as a recommendation, I think we could probably deal with that tomorrow. However, in fairness, I did instruct the committee members that today we would go until two o'clock to deal with clause-by-clause, if necessary. Since we've completed clause-by-clause, I'm happy to put this on the agenda for tomorrow, if you so choose to bring it back.

Tomorrow's meeting, colleagues, should be short. We do have the minister coming to make a presentation. Other than that, we don't have witnesses coming on Bill C-55.

Since we don't have any witnesses, my suggestion, Mr. Owen, is that if you want to get on the agenda, there's more than enough time, if you so choose. If not, tomorrow's meeting will be brief.

If there's any other business dealing with the committee, I'm happy to entertain that now.

Seeing none, colleagues, we'll see you tomorrow at 11 o'clock for the introduction of Bill C-55. Thank you.

The meeting is adjourned.