Procedure and House Affairs Committee on Oct. 18th, 2012

[Tim Uppal, Conservative, Edmonton—Sherwood Park, AB]

You're correct. Yes, because then the person is their candidate.

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

For nomination contests within EDAs, what if you had a rogue candidate who borrowed a bunch of money and then lost the nomination? I'm assuming the EDA and the party would not be responsible for that candidate because the person was never certified and never had his or her papers signed.

[Tim Uppal, Conservative, Edmonton—Sherwood Park, AB]

You're correct. They would not be responsible.

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

In that situation I guess it would be up to the financial institutions, if the person did get a loan from a financial institution, to chase down the responsible individual. No action would be taken against either the party or the EDA. My concern would be, if this happens repeatedly—and I don't think it will happen all the time, but it could happen with many small parties, depending on the political situation within the country—could something like that make the financial institutions a little gun-shy to give out loans? Is there any concern about that?

[Tim Uppal, Conservative, Edmonton—Sherwood Park, AB]

First of all, for a nomination contest, there are already limits on how much you are to spend. We're already looking at maybe $10,000 or $15,000 for a nomination contest. The amounts are already much lower than what we've heard of in other leadership races. The amounts are lower. For those smaller amounts, you can still borrow money or get guarantors from family and friends up to the donation limit, which is currently $1,200. You could essentially find seven or eight friends and fund that nomination race. If you do go to a financial institution, that debt would not go to the EDA or the party. It would be incumbent on that person.

[The Chair, Conservative, Joe Preston]

Thank you. Your time is up, Mr. Armstrong.

Mr. Martin.

[Pat Martin, NDP, Winnipeg Centre, MB]

Thank you, Mr. Chair.

I appreciate the opportunity to participate in this. As some of you may remember, we tried to introduce this very thing into the Federal Accountability Act in 2006. We've been aware of this for years. We fully agree that nobody should be able to buy an election in this country, but previous attempts at election financing reform have left loopholes big enough to drive a truck through. Some may remember a massive truck in one specific circumstance in Mississauga—Streetsville.

As I understand it, one of the things that we raised in 2006 is that banks aren't really excited about this kind of small loan, especially when it can be so complicated. You might have 20 guarantors for one $25,000 loan. There's a great amount of paperwork. There is no money in this type of nickel-and-dime business for financial institutions. Should there not be a public duty component? If we give the chartered banks the lucrative privileges of cheque cashing and credit cards, should there not be an obligation for them to support our electoral system by being, within reason, obliged to participate in this type of service for elections?

[Tim Uppal, Conservative, Edmonton—Sherwood Park, AB]

I don't really think it'd be a great thing to tell banks how to run their business. This transaction will make them money. You're talking about the chartered banks and the larger banks, but there are actually hundreds of financial institutions that can provide these loans, and all candidates will have equal access to them. That's the important part.

[Pat Martin, NDP, Winnipeg Centre, MB]

Equal access, I agree is—

[Tim Uppal, Conservative, Edmonton—Sherwood Park, AB]

Equal access means you'll be able to go to a bank and if it doesn't work out there, you can walk across the street and go to an insurer or somewhere else.

[Pat Martin, NDP, Winnipeg Centre, MB]

Yes, but some people are going to wind up at Money Mart. This is exactly the kind of business that the chartered banks, at least, have been walking away from. Look at the amount of paperwork associated with checking out 20 signatories to one $20,000 loan and doing the due diligence associated with that. I don't think there is any profit for the banks at 2% or 4% interest on that kind of an operation.

[Tim Uppal, Conservative, Edmonton—Sherwood Park, AB]

The system currently exists in Ontario. They base those loans on the rebate the candidate would receive if he received 10% of the vote.

[Pat Martin, NDP, Winnipeg Centre, MB]

But the best surety, which used to exist, is the per-vote subsidy, the public $1.75 per-vote subsidy. Your government is eliminating that.

[Tim Uppal, Conservative, Edmonton—Sherwood Park, AB]

Which would go to the party and not the candidate. That would only have gone to the party.

[Pat Martin, NDP, Winnipeg Centre, MB]

Well, the candidate is associated with the party. It's his riding association that's really—

[Tim Uppal, Conservative, Edmonton—Sherwood Park, AB]

The riding association did not receive that money either; only the party did.

[Pat Martin, NDP, Winnipeg Centre, MB]

It depends on your party.

[The Chair, Conservative, Joe Preston]

Thank you.

Mr. Williamson.

[John Williamson, Conservative, New Brunswick Southwest, NB]

Thank you, Chairman.

Mr. Armstrong asked many of the questions that I was going to ask, but I have a few others that are more detail oriented.

In your speech you said that if the amount of any loan given or guarantee is subsequently paid back within the same calendar year, it is returned to the lender's annual contribution limit for that year.

To confirm and clarify, right now there are three contribution possibilities for donors: the EDA, the national party, and the leadership contestants. That's not changing, is it?

[Tim Uppal, Conservative, Edmonton—Sherwood Park, AB]

This bill would not change that situation. It was a recommendation by this committee that if somebody was to guarantee a loan for the contribution limit—$1,200 as it currently is set—and sometime during the campaign that guarantee or loan was repaid or taken back, then that person could donate.

[John Williamson, Conservative, New Brunswick Southwest, NB]

But to another leadership contestant.

[Tim Uppal, Conservative, Edmonton—Sherwood Park, AB]

Sure.

[John Williamson, Conservative, New Brunswick Southwest, NB]

Okay. You're not merging the national donation and the leadership donation.

[Tim Uppal, Conservative, Edmonton—Sherwood Park, AB]

This does not change that.

[John Williamson, Conservative, New Brunswick Southwest, NB]

Okay, good.

I want to pick up on what Mr. Martin was saying because I think I see where he's going.

If we were to really be blunt, this bill is meant to deal with leadership loans, by and large. Currently, provisions are in place for EDAs, for campaigns, for candidates at local election campaigns to work either with their EDAs or with financial institutions to borrow funds. If you're looking for an answer, the proof is that we haven't seen big problems with the repayment of those loans at the local level with Elections Canada that I'm aware of.