Madam Speaker, Bill C-24 is supposed to make the whole electoral process and the funding in particular more transparent. In fact, the bill is envisioned to make the whole thing a little more democratic than what we have at the present time.
It covers a number of areas. It would require the registration of all political parties and it would ban political donations by corporations and unions. It would limit individuals' contributions and would regulate nominations for candidates and for leadership personnel. It also would establish a very controversial provision, which is the public funding of electoral campaigns.
I want to address two areas that are glaring loopholes in the legislation regarding financing. This legislation in the first instance is supposed to make the financing of campaigns of political parties more transparent. One of the statements to support this thing was that the reason unions and corporations would be banned from making contributions was to sort of make the influence of the large donors less on the political process.
There is a particular provision that exists in the world that this act studiously avoids and does not deal with at all, that is, the creation of trusts. Trusts are a very interesting construct. This would allow for individuals, corporations, unions or anyone to set up a trust account.
We have before us now the requirement that financial institutions, if they want to merge like the banks or the insurance companies, must go through an approval process. I can easily conjecture the possibility of one of these institutions, or a number of them, establishing a trust fund for a particular individual who has political influence, and telling that individual that it will set up a $1 million trust fund so the individual can access expenditure funds, as long as they are not electoral, to buy motor homes, houses, land or whatever with it. The individual would be told that it was his or her trust fund but that it had the condition that when the legislation came before the House, the individual would support the merger or coming together of certain business ventures.
If there were ever the possibility of a direct connection between big money and political influence, it would be through the arrangement of a trust situation. That is studiously avoided in the legislation.
I suggest that it might be very difficult to enforce particular legislation with regard to trust that does not do away with the fact that there is a vehicle which can be used and clearly ties contributions to a politician through a trust which is outside the provisions of this particular legislation.
If the purpose of the legislation is to make democracy more transparent and to make individuals more accountable, to avoid this particular provision is to deny dealing with exactly one of the major issues that apparently was the motivation for bringing this legislation into being in the first place.
I also wish to draw to members' attention the complexity of the legislation. When a constituency registers, there are clear provisions for the processing of expense claims, deemed contributions, that is, claims that are unpaid after 18 months, financial reporting, contributions to be forwarded to the receiver general in certain cases, and corrections and extended reporting periods. An auditor's report is required if the contributions or expenses of the electoral district association exceed $5,000. Provision is made for the payment of audit expenses to a total of $1,500, and, pursuant to clause 30, the returns of registered associations shall be published.
I want to go further into that business of financial arrangements. I think the people who are watching this would be very interested in listening to some of these things that the Library of Parliament researchers have put together.
The intention appears to be to compensate parties for the removal of corporate and union donations, which are largely made at the party level rather than to individual candidates or constituency associations. Political parties are at the heart of a modern political electoral system and, arguably, are essential, which is correct, and I agree with that.
At present, registered political parties are publicly funded through the tax system. I agree with that. It is roughly about 40%. The provisions in this bill would raise that total contribution attached to the public purse to somewhere around 70%. Bill C-24 proposes to extend and enhance the extent of access to political parties to the public purse.
The rate of reimbursement of electoral expenses for candidates is currently 50%. Bill C-24 proposes to raise to 50% the reimbursement rate which is now 22.5%. With respect to individual candidates, the bill proposes that the percentage of votes that a candidate must obtain in his or her riding to qualify for reimbursement of electoral expenses be lowered to 10% from the current 15%. Fewer votes would be required in order to qualify for the rebate.
The controversial part is that the bill would provide for an annual allowance to registered parties in the amount of $1.50 per vote received by the party in the previous general election, provided that the party had received in the last election either 2% of the valid votes cast nationally or 5% of the votes in the riding where the party ran candidates. The figure of $1.50 is apparently based on the calculations of potentially lost income to parties as a result of the changes in eligibility of donors.
It appears that several provinces in Canada provide allowances to registered parties based on their electoral results. That does not make it right. Just because somebody is doing it does not mean that it is the right thing to do. This is a controversial issue and largely a matter of policy and philosophy as to whether one subscribes to that.
The reason I have difficulty supporting this kind of thing is because it would give the party that won in the last election a financial advantage over any other party that might be contesting the next election. That is not democratic. That is building on a bias which is false, which is bias in its interpretation and which gives an advantage to a particular group.
As an incentive to encourage contributions by individuals, the bill also introduces amendments to the Income Tax Act to double the amount of an individual's political donation that is eligible for a 75% tax credit, from $200 to $400, and to increase accordingly each other bracket. All of these are different ways of getting more money out of the public purse.
The question really becomes: Where is the individual's choice in the matter?
I want to point out another loophole in the bill that all members of the House ought to be aware of. A deemed contribution does not apply to an unpaid claim that on the day referred to in the previous subsection has been written off by the creditor as an uncollectable debt in accordance with a creditor's normal accounting procedures. This can be read very clearly, and I have checked it out with some legal beagles who have told me that the reading is correct. This is a possible reading. It would then be possible for someone to extend a loan to either a candidate or to a party and then declare, according to his or her particular pattern, that the loan is uncollectable. What could that be? It could be that a bill is extended to the party or to the candidate and the candidate agrees not to pay it. If it has not been paid for 19 or 20 months, the company says that it is not collectable because that is the time a bill is usually written off. Therefore it is an uncollectable debt and not a contribution to a party and not a deemed contribution.
That is a loophole that exists in the legislation. I suggest that not only does this hide a lot of things, but it provides for the chicanery to allow the political, misleading statements and the clever arguments that really hide the truth in this legislation. I cannot support the legislation for those reasons.