I'd like to begin, Mr. Chair, by putting the present situation in context.
Under the present law, the Commissioner of Canada Elections has the power to investigate anyone who has used loans deliberately to circumvent donation limits. That would be a clear offence under the existing section 497 of the Canada Elections Act.
Elections Canada rightly points out that failure to repay a loan does not necessarily prove intent and therefore is not automatically an offence under the act, although it is non-compliance with the act. However, Elections Canada has all the powers to investigate whether these Liberal leadership contenders deliberately used loans to circumvent donation limits. It remains to be seen whether Elections Canada intends to carry out such an investigation.
That being said, the changes in the fair elections act will close this loophole altogether so that people cannot use unpaid debts to circumvent donation limits. It does this by requiring that borrowers use recognized financial institutions or political parties that have commercial repayment plans and interest rates and by requiring that it become an automatic offence after three years of non-repayment.
That provision is not retrospective. It will not apply to past incurred debts. However, for those who have outstanding debts, we are giving some flexibility in repaying them. They will be allowed to collect donations from previous donors as long as they do not exceed the annual donation limit. Those provisions will be retrospective. In other words, past incurred debts can be reimbursed through this change on the fundraising side.