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House of Commons Hansard #31 of the 39th Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was loans.

Topics

Motions in AmendmentCanada Elections ActGovernment Orders

3:30 p.m.

York—Simcoe Ontario

Conservative

Peter Van Loan ConservativeLeader of the Government in the House of Commons and Minister for Democratic Reform

moved:

Motion No. 1

That Bill C-29, in Clause 4, be amended by deleting lines 13 to 17 on page 2.

Motion No. 2

That Bill C-29, in Clause 5, be amended by replacing lines 29 to 35 on page 4 with the following:

“case of a candidate, the selection date as defined in section 478.01 in the case of a nomination contestant, the end of the leadership contest in the case of a leadership contestant, and the end of the fiscal period during which the loan was made in the case of a registered party and registered association, is deemed to be a contribution of the”

Motion No. 3

That Bill C-29, in Clause 5, be amended by replacing lines 32 to 35 on page 5 with the following:

“Officer shall inform the lender of his or her decision; furthermore, the candidate's registered association or, if there is no registered association, the registered party becomes liable for the unpaid amount as if the association or party had guaranteed the loan.”

Mr. Speaker, I am pleased to be bringing before the House once again the bill on accountability with respect to loans, former Bill C-54 now Bill C-29, which was reinstated at report stage, in the same form as at prorogation.

The hon. members will certainly recall that this bill amends the Canada Elections Act in order to establish stricter and more transparent rules for loans to political entities. These amendments will ensure a more responsible and transparent use of loans as a tool for political financing. In this regard, accountability and transparency are essential to maintain the confidence of Canadians in the integrity of the political process.

This bill is one of many measures taken by our government to improve democracy and accountability in Canada, in accordance with three major principles of democratic reform: reform of political financing, improving the electoral system and modernizing the Senate.

In the October 2007 throne speech, the government reaffirmed its intention to proceed with these reforms. Our dynamic legislative program of democratic reforms will make real and significant improvements to our democratic institutions.

I remind the House that the amendments proposed for the treatment of loans in Bill C-29 are an important measure to maintain public confidence in this institution and our democracy.

Canadians must have confidence that there is no opportunity for the wealthy to secure undue influence in our political process.

The measures in Bill C-29 follow closely on this government's achievements in the Federal Accountability Act to ensure greater accountability and transparency in political financing. The objective was to eliminate the undue influence of big money in politics.

Members will recall, however, that during the recent Liberal leadership campaign big money found a back door to undue influence through large personal loans well in excess of the legal contribution limit.

The amendments would mean that the same standards of transparency that currently apply to contributions would apply to loans.

By closing the loopholes that allow people to use loans to get around both the limits on contributions and the restrictions on their source, Bill C-29 will ensure that the reforms that have already been made to political contributions cannot be undermined by the abuse of loans.

I would like to remind the House of the measures that are included in this bill. First, the bill would put in place a uniform and transparent disclosure system for all loans to political entities, including the compulsory disclosure of loans' terms and conditions and of lenders' and guarantors' names. This measure would make loans more transparent and standardize the treatment of loans for all categories of political entity, which is not the case at present.

Second, the annual contribution limit for individuals established in the Federal Accountability Act would apply to loans as well. Loans and loan guarantees would be counted as contributions toward the $1,100 annual limit at the time they were made. This change would ensure that loans could not be used to circumvent the limit on individual contributions.

Third, only financial institutions and other political entities could make loans beyond that $1,100 limit. This change would mean that unions and corporations would now be unable to make loans consistent with their inability to make financial contributions. They could not disguise contributions as loans, which is a possibility under the current law.

Lastly—and I will come back to the importance of this proposal shortly—the bill proposes to tighten the rules for the treatment of unpaid loans to ensure candidates could not walk away from unpaid loans. Riding associations, or the guarantor if there is no riding association, would be held responsible for unpaid loans taken out by candidates.

In the previous session, the Standing Committee on Procedure and House Affairs devoted careful study to the provisions of this bill and, after recent deliberations, has reported it back to the House with amendments.

Several of these amendments are valuable additions to the rules governing the treatment of loans, because they make the system described in the bill more equitable.

Notably, a change has been put forward by government members and supported by our opposition counterparts to exclude from the annual contribution limit any portion of a loan that is repaid to the lender and any unused loan guarantees. The effect of this change is to allow a lender, whose loan has been repaid or whose guarantees have been unused, still to contribute up to the annual contribution limit.

A change has also been put forward by our former colleague from Vancouver--Quadra, Mr. Owen, to require the Chief Electoral Officer to hear representations from affected interests before making a determination about a deemed contribution. This change, although technical in nature, would ensure certainty and uniformity in procedural fairness in dealings with Elections Canada.

There was also an amendment to extend the period of time as to when an unpaid loan is deemed to be a contribution from 18 months up to 3 years. In the spirit of working in a minority Parliament, the government is also prepared to accept this amendment.

I commend these amendments to the House on the grounds that they improve the overall regime of political financing in the Canada Elections Act.

However, there were some unwelcome amendments from the committee.

At this time, I would like to give some credit to my colleague, the New Democratic Party member from Winnipeg Centre. He has been a strong supporter of this legislation and, in fact, championed it even before it was introduced. We appreciate the cooperation he has shown with us in helping to develop the bill and discussing it at every stage. In particular, I appreciate his cooperation and discussion on the issue of redressing the two unwelcome amendments that were proposed in committee but which the government proposes to reverse.

I thank him for the commitment he gave to this government that his party would support the effort to remove these amendments. These amendments cause the government concern because they undermine the regime that is presented in the bill. Therefore, we have put on notice, motions to amend the bill to restore certain important provisions that have been undermined by opposition amendments.

One of these unwelcome amendments provides that the contribution limits for leadership candidates be calculated annually rather than per contest, as is now the case. This change, if it were allowed, would allow contributors to bypass the legal limit on contributions to leadership campaigns if a candidate carried that debt over different calendar years or if the leadership campaign happened to overlap different calendar years.

That runs counter to the principle enacted in the Federal Accountability Act that contributions to leadership campaigns by individuals be capped at $1,100 per contest. The government considers this change unacceptable and proposes that the per event contribution limit be restored.

I appreciate again the support that the member for Winnipeg Centre has expressed to us on behalf of his party for that amendment. We are optimistic that, with the support of the New Democratic Party, we should be successful in restoring the provisions originally intended to achieve accountability and political loans on that level.

The second unwelcome amendment removed from the bill is the provision that a riding association would assume liability for the unpaid loans of an endorsed candidate. The change proposed by the opposition would allow political candidates to walk away from debts incurred in campaigns. This is contrary to the spirit of accountability in the bill.

This proposed opposition change would undo one of the most important accountability enhancements presented by the government for the treatment of loans, an enhancement that would create greater certainty about the responsibility for unpaid loans.

The original form of the bill, which we are seeking to restore, not only would ensure principles of financial accountability at the local level, but would also encourage local riding associations to work more closely with their candidates and their campaigns. Again, I appreciate the support and the commitment that the New Democratic Party member gave on behalf of his party to the government and to myself for our efforts to restore the bill to its original form on this issue of trailing debt from campaigns.

A similar rule applies at the provincial level of my home province of Ontario. Section 44(4) of the Ontario Election Finances Act provides that any eventual provincial candidate's financial deficit is assumed by the local riding association. This has worked very well in Ontario at the provincial level, and opposition concerns, which resulted in the provision being amended in our bill at committee, are clearly ill-founded based on the very successful practice experienced by all of the three major parties in Ontario in dealing with the bill.

The government is, therefore, proposing to restore the provision that a candidate's registered association, or registered party if there is no registered riding association, would become liable for the unpaid amount of a loan that a candidate does not repay.

Finally, I would like to point out that there is a technical amendment required to clause 5 of the bill. That clause was amended at committee and the language employed about when a loan is deemed to be a contribution ought to be made consistent with the defined terms used throughout the Canada Elections Act. We are, therefore, proposing that the language be clarified.

In all, these are amendments that are reasoned and principled and serve the overriding principle that accountability be strengthened for the use of loans as a political financing tool.

We are committed to cleaning up campaign finance. We are going to move to do that as we move forward--

Motions in AmendmentCanada Elections ActGovernment Orders

3:40 p.m.

Conservative

The Acting Speaker Conservative Andrew Scheer

Questions and comments, the hon. member for Esquimalt—Juan de Fuca.

Motions in AmendmentCanada Elections ActGovernment Orders

3:40 p.m.

Liberal

Keith Martin Liberal Esquimalt—Juan de Fuca, BC

Mr. Speaker, it is interesting to see how the two concepts of conduct and accountability get confused in the House. The government has stood on its hind legs and has spoken at length about accountability through its so-called accountability bill, but that bill had everything to do with conduct.

The government House leader across the way likes to use the term “accountability” with respect to this. We are all in favour of increasing transparency and accountability in the electoral process. In fact, ours was the party that made the largest ever decrease in and restriction of funding and donations to electoral parties and from individuals in the history of this Parliament.

Could the government House leader define for the House what he means by public accountability?

Motions in AmendmentCanada Elections ActGovernment Orders

3:45 p.m.

Conservative

Peter Van Loan Conservative York—Simcoe, ON

Mr. Speaker, that is a very broad question, but in the case of the legislation at hand, which deals with political financing, what we are seeking to do in the case of riding associations and local candidates is make those candidates accountable for the debts they incur. This is something that the Liberal Party, believe it or not, objected to at the committee and brought in an amendment to eliminate.

The Liberals propose that a candidate should be able to run up debts, collect loans, have unpaid bills and then simply walk away from them and be able to do that legally. The candidate should be able, they propose, to convert those loans, whatever their quantity, and walk away. It could be a loan for $50,000 or $60,000, which would of course convert a loan into a contribution well above the legal limit. They are proposing an amendment to allow exactly that to happen.

We do not believe that should happen. We think accountability means that when we take on an expense, we pay it. It means that when we take on a debt, we pay it and we are responsible for it.

That is true accountability. That is why we want to get rid of the amendment that the Liberal Party supported and introduced to eliminate that accountability for one's trailing debts at the riding level. We wish to maintain that accountability in our bill.

It is a principle of fiscal responsibility. It is a principle of honouring one's word. It is the least we can expect of the people who seek to represent Canadians in this grand place, the House of Commons.

Motions in AmendmentCanada Elections ActGovernment Orders

3:45 p.m.

Liberal

Keith Martin Liberal Esquimalt—Juan de Fuca, BC

That is very interesting, Mr. Speaker. This is a fascinating discussion. I mean that in a very constructive sense for the government House leader. The hon. government House leader did not talk about accountability at all. He was speaking about public conduct. He was talking about conduct, not public accountability.

Public accountability is the obligation of elected officials to tell the public what they are doing, why they are doing it, and who is going to benefit from it, and to have measurable standards upon which the person can be judged by what he or she is going to do. This is done before we actually implement something. That is public accountability, because within public accountability we actually have an internal mechanism for conduct.

If the government were to adopt true public accountability and make it the obligation of public office holders to freely and openly express and describe to the public what they are going to do before they do it and who is going to benefit, then true public accountability and conduct would be the extension of that.

I want to ask the hon. House leader if he would change his definition. Does he not agree with me on--

Motions in AmendmentCanada Elections ActGovernment Orders

3:45 p.m.

Conservative

The Acting Speaker Conservative Andrew Scheer

The hon. Minister for Democratic Reform.

Motions in AmendmentCanada Elections ActGovernment Orders

3:45 p.m.

Conservative

Peter Van Loan Conservative York—Simcoe, ON

Mr. Speaker, to me it seems quite clear. Being accountable for our debts means that we pay them. I think everybody understands that. That is common sense. There may be some other bureaucratic approach to things, but that is a very simple premise.

In terms of public policy and being accountable, I think Canadians want their politicians, their representatives in the House of Commons, to be accountable primarily and first and foremost to the people who elected them, not to people with huge sums of money, who can, with millions of dollars, make loans in excess of the legal limit for contributions to Liberal leadership candidates, effectively mortgaging them.

That happened a year ago in that Liberal leadership campaign. So their first responsibility is not to Canadians and not to the voters who put them there, but rather to the people to whom they owe hundreds of thousands of dollars individually and millions of dollars collectively. That was the situation in the Liberal Party after the last leadership campaign because this law still had a loophole in it, which we are seeking to address today.

When I talk about accountability to Canadians, I think that first and foremost they want to see us get rid of the undue influence of big money in our political financing system. Progress has been made. We have serious contribution limits. We got rid of corporate contributions and so on.

However, as we discovered in the Liberal leadership campaign, there is big money and the Liberal Party members could find a way to play that game in the past under the current law. They did it through large personal loans. We are going to get rid of that and have true accountability, where votes and Canadians matter, not big money.

Motions in AmendmentCanada Elections ActGovernment Orders

3:45 p.m.

Liberal

Marcel Proulx Liberal Hull—Aylmer, QC

Mr. Speaker, the Liberal Party supports efforts to improve the transparency and accountability of the electoral process. Early on, our party was the one that passed the bill to limit the role of corporations and unions in election financing. We also initiated the most significant contribution limit reduction in Canadian history.

That is why Liberal party leadership candidates exceeded Elections Canada's requirements to disclose campaign loans. In contrast, the current Prime Minister is still refusing to disclose the names of those who contributed to his leadership campaign in 2002.

In practice, this legislation would give the last word to financial institutions, not Canadians, when it comes to deciding who can run for office in Canada. This bill would also have a negative impact on Canada's middle class, particularly nomination contestants, at a time when the government should be encouraging Canadians to increase their participation in the democratic process.

If the proposed changes are implemented, it will be very difficult for Canadians, particularly those with limited means who know few wealthy potential backers, to try to get elected in Canada because it is hard to get a loan from a financial institution. Even though we are in favour of a transparent and accountable electoral process, we believe that this bill unduly restricts Canadians' access to the democratic system and that it will prevent them from participating in it.

The Conservatives would have us believe that current legislation enables individuals to walk away from debts. Nothing could be further from the truth. Under the current legislation, individuals cannot use loans to bypass contribution limits, nor can they walk away from debts with impunity. The bill merely reiterates existing provisions. The Conservatives think they can fool Canadians into believing that this bill in some way makes significant changes to the law.

For the record, the official purpose of this bill is to reduce the possibility of undue influence in public life by wealthy interest groups. Obviously, this bill was developed to put the Liberal Party of Canada at a financial disadvantage. The main consequence of this new bill is that it severely restricts the opportunities for people running for office to take out loans, a common practice in the past. The proposed legislation would prohibit individuals from making a loan or guaranteeing a loan to political candidates by restricting contributions to the $1,100 limit currently in the Federal Accountability Act.

Furthermore, as in the Federal Accountability Act, unions and corporations cannot make a loan to political candidates, parties or associations. Of course, the government claims that the purpose of this measure is to reduce the influence of wealthy financial contributors, who apparently used personal loans to bypass the restrictions on donations in the Elections Act.

The fact of the matter is that during our last leadership campaign, all the candidates publicly disclosed all the loans they had received for their campaign and went above and beyond what was required by Elections Canada. If this bill is passed, only political parties such as the Liberal Party of Canada or local riding associations and financial institutions will be able to make loans to candidates, and it must be at the market interest rate.

There are also new disclosure criteria, requiring that all conditions such as the amount, rate, lender's name and address, and the guarantor's name and address, if applicable, be disclosed.

If the Chief Electoral Officer determines that an unpaid amount of a loan to a candidate of a registered party has been written off, the registered association or, if there is no registered association, the registered party becomes liable for the unpaid amount as if the association, or the party, had guaranteed the loan.

The minister referred to the changes in this regard. I should remind the House that, when it met last spring to consider the bill, numbered C-54 at the time, the Standing Committee on Procedure and House Affairs agreed by a majority vote to amend the government's proposal, to ensure that debts incurred by candidates without the consent of their associations or parties not come back to haunt the associations or parties. A majority of the committee did not want this to happen.

Unsatisfied with this majority decision of the committee, the government is now changing the wording of the bill to make this undesirable situation possible again.

The original text of Bill C-29 read, on page 5, lines 32 and 33, “the claimant, the candidate's registered association or, if there is no registered association, the registered party.” It said that these parties shall be informed. Today, the government is seeking to amend lines 32 and 33. At line 32, it is keeping the word “claimant”, but replacing the comma with a semicolon followed by “the registered association or, if there is no registered association, the registered party”, and it adds: “becomes liable for the unpaid amount as if the association or party had guaranteed the loan.”

This reversal of the reversal adopted by the majority in committee in the spring is unacceptable in that the association—or, if applicable, the party—would be held responsible for a loan without previous knowledge of it, without having guaranteed the loan, and without having been informed that the loan was contracted. A national association—or a national party—could quite easily end up in a situation whereby a candidate, without consent from the association or the party, could incur personal debts, under the pretext that it is for an election campaign. Then the party—or the association—without warning, would be responsible for paying back the loan. It is very difficult to accept that part.

There is also the matter of financing leadership races. The minister was honest. He bluntly said that instead of allowing citizens to participate by making contributions on an annual basis, as long as the loan has not been paid back in full, citizens should instead make a single contribution for a maximum of $1,100. The legislation prevents them from participating any more than that in leadership race financing.

Since I do not have very much time left, I want to say that although we are in favour of having a transparent and accountable electoral process, we believe that this bill unduly limits Canadians' access to the democratic system and that it will impede their participation.

Motions in AmendmentCanada Elections ActGovernment Orders

3:55 p.m.

Liberal

Larry Bagnell Liberal Yukon, YT

Mr. Speaker, not being a member of the committee, I would ask the member to outline in more detail what items the majority of the committee actually approved democratically and the government is now trying to retract.

Motions in AmendmentCanada Elections ActGovernment Orders

4 p.m.

Liberal

Marcel Proulx Liberal Hull—Aylmer, QC

Mr. Speaker, the major change would be in Motion No. 3, the amendment, where the original wording on page 5, lines 33, 34, and 35, says:

--the Chief Electoral Officer shall inform the claimant, the candidate's registered association or, if there is no registered association, the registered party of his or her decision.

Now the Conservatives have changed it and it says:

[Then the Chief Electoral] Officer shall inform the lender of his or her decision; furthermore, the candidate's registered association or, if there is no registered association, the registered party becomes liable for the unpaid amount as if the association or party had guaranteed the loan.

This is exactly the point where, in committee, opposition parties underlined the fact that even though the association or the party would not have guaranteed the loan, they would end up with the liability. They would end up having to repay that loan which, as I have mentioned before, they had never approved of, or for all we know, maybe never even had knowledge of.

The majority of the committee voted on this and it was agreed that this was unfair for the association and the national parties, and therefore, it was amended in committee, so that this particular debt would not turn back to the association or the party.

The other change done at committee dealt with financial contributions during a leadership campaign. I said at the start of my presentation that this particular piece of legislation is most certainly going to give the Liberal Party of Canada a hard time. We are the party that had a leadership race. We were the party that had to answer to the new law in the sense that we had to disclose all the contributions, whereas the present Prime Minister did not disclose all of the contributions that were received for his leadership campaign.

The Conservative government is trying to force leadership candidates to limit financial contributions to a maximum amount of $1,100, saying that a leadership race is one event and it would limit the financial participation to $1,100 per that event. At committee we discussed this and it was agreed that it would become a financial contribution of $1,100 per year until the debt of the leadership candidate had been fully erased.

Now the Conservatives are reversing the reversal that had been done and they are planning on saying that, no, in a leadership race it does not matter how long it takes to reimburse, there would be one contribution per leadership race to a maximum of $1,100.

These are the two major differences between what the procedure and House affairs committee had worked on and decided back in the spring of 2007. Now the Conservative government is saying it does not care what the majority of the committee decided democratically, it is ready to impose and change it so that it would be brought back to the original version of the bill. I do not think that this is right.

Motions in AmendmentCanada Elections ActGovernment Orders

4 p.m.

Bloc

Pauline Picard Bloc Drummond, QC

Mr. Speaker, I am happy to take part in this debate on a bill that aims to correct another problem with the Federal Accountability Act. I would remind this House that when Bill C-2 was studied, the government was interested in passing the bill quickly, an attitude that we in the opposition parties, the media and Democracy Watch criticized.

The Bloc Québécois supports Bill C-29 in principle, because it addresses the problem of loans that allowed individuals to bypass political contribution restrictions. In fact, Bill C-29 fills the gaps the government left in studying Bill C-2, which contains little protection for whistleblowers and does nothing to improve the Access to Information Act.

Quebeckers have long understood the importance of having clear, reliable rules on financing political organizations. The Bloc Québécois supports Bill C-29 in principle, because it should prevent people from getting around the financing rules, especially as regards contribution limits.

I want to stress that the Bloc Québécois fought long and hard for these limits. Inspired by the system that has been in place in Quebec for 30 years, we called on the government to put an end to financing by companies and limit individual contributions. Bill C-29 incorporates the only change proposed by the Bloc Québécois when Bill C-54 was studied in committee. Then, we decried the fact that the political party was held responsible for its candidates' debts, even if the party was not a party to the contract between the individual and his or her financial institution.

I must say that I am extremely disappointed that the government is refusing to comply with the committee's decision on this. Although the current government wants to demonstrate good faith and sincerity, the fact remains that its intentions are not really genuine. In fact, the Conservatives are using this bill to point out that during the most recent Liberal leadership race, several candidates took out big loans to bypass financing restrictions. Yet the Conservatives are forgetting that the Prime Minister himself has not disclosed all of the contributions he received during the 2002 leadership race.

If the Conservatives think they can pass themselves off as the champions of transparency and the standard bearers of ethics, I must remind them of a few facts that might force them to reconsider. We all remember, as does the public, all the back and forth between political offices and lobbying firms, the contracts awarded to political friends, the use of public funds for partisan purposes, the many partisan appointments, the appointments of judges and immigration commissioners, that is, to the IRB, on the basis of their political beliefs, and the publication of a guide intended for Conservative members who chair committees that lists every possible, imaginable measure to obstruct the work of committees.

Bill C-29 aims to correct the problem of loans used to circumvent the limits on contributions paid to political parties, but certain problems remain. Whistleblower protection comes to mind. During the election campaign, the Conservatives promised to guarantee whistleblowers greater protection. They wanted to “ensure that whistleblowers would have access to adequate legal counsel”. Yet the Conservatives' bill allows for only $1500 in legal fees.

They also wanted “to give the public sector integrity commissioner the power to enforce the whistleblower legislation”. They wanted “to guarantee protection to all Canadians who report wrongdoing within the government, not just to public servants”. Furthermore, they wanted “to take away the government's ability to exempt crown corporations and other entities from the application of the whistleblower legislation”.

In the recent sponsorship scandal, one of the whistleblowers, Allan Cutler, a Conservative Party candidate in the 2006 election, I should mention, was somewhat critical of Bill C-2. He maintained that Bill C-2 was far from perfect and had some problems that needed fixing, especially with respect to the provisions for protecting whistleblowers.

On April 5, 2005, the Liberal government released a discussion paper on reforming the Access to Information Act. This document met with general criticism. In addition to doubling the minimum administrative fees charged to the public, the proposal by the member for LaSalle—Émard, maintained all the exceptions provided for in the legislation.

If the Liberal Party never managed to bring about any useful reform of access to information in 13 years, the Conservative government, despite its election promise, did not do any better. We are still waiting for this reform.

The public knows that once in power, the Conservatives and the Liberals are not in such a hurry to reform the legislation. The information commissioner recently observed that this is a common trait in all governments:

The reason that action, not more study, is required is that governments continue to distrust and resist the Access to Information Act and the oversight of the Information Commissioner.

With regard to the lack of transparency in election financing, we can see that the Liberals and the Conservatives are equals. What is the Prime Minister waiting for to disclose all the contributions he received during the 2002 Canadian Alliance leadership race? The public must know that the Prime Minister admitted, in December 2006, that he failed to disclose to the Chief Electoral Officer that he had received hundreds of thousands of dollars. The money consisted of registration fees collected from Conservative delegates attending the Conservative Party's May 2005 convention. The party was forced to treat convention registration fees as donations. The report indicated that three delegates, including the Prime Minister, had exceeded their annual contribution limit of $5,400 to the party.

At the very least, the Conservative government is a government susceptible to powerful influences. The Prime Minister, when he was leader of the opposition, reprimanded the Liberals for the comings and goings between political offices and lobbying firms. Yet, since taking power he has done no better.

To summarize, the bill establishes a standard and transparent reporting system for all loans made to political entities, requiring the mandatory disclosure of the terms of these loans as well as the identity of the lenders and guarantors.

The bill would prohibit all unions and corporations not only from making contributions, in accordance with the Federal Accountability Act, but also from lending money.

Loans, loan guarantees and contributions from individuals could not exceed the limit set out in the Federal Accountability Act, which is $1,100 for 2007.

Only financial institutions, at market interest rates, or other political entities would be able to lend money exceeding that amount. The rules for unpaid loans would be tightened so that candidates could not default on their obligations.

Loans not repaid within 18 months would be considered a political contribution.

Riding associations, or where there are none, the parties themselves, would be held responsible for their candidate's unpaid loan.

For all these reasons, we support the principle of this bill but we truly hope that motion no. 3 will be defeated.

Motions in AmendmentCanada Elections ActGovernment Orders

4:10 p.m.

Liberal

Larry Bagnell Liberal Yukon, YT

Mr. Speaker, I wonder if the member could comment on the amendments that are coming forward at this time from committee, the ones that have been accepted by the government and the ones that have been rejected.

Motions in AmendmentCanada Elections ActGovernment Orders

4:15 p.m.

Bloc

Pauline Picard Bloc Drummond, QC

Mr. Speaker, the amendment I am most concerned about is the one in lines 29 and 30. It would make a party or other unregistered association responsible for candidates' loans. A candidate could decide to borrow money without informing the party, without the party's knowledge. Later, if the candidate failed to repay the loan—no matter what the reason—the party or the unregistered association would be responsible for the debt. I find that unacceptable.

When the committee discussed this liability issue, which could hurt the party or even jeopardize it, we all agreed that parties should not be liable for debts incurred by candidates.

I am therefore extremely disappointed that the government refused to go along with this.

Motions in AmendmentCanada Elections ActGovernment Orders

4:15 p.m.

Liberal

Larry Bagnell Liberal Yukon, YT

Mr. Speaker, the member said that the Prime Minister refused to say who the donors were in his leadership campaign. Is that true? Was the Prime Minister actually asked to outline these? That would seem to be normal accountability.

Motions in AmendmentCanada Elections ActGovernment Orders

4:15 p.m.

Bloc

Pauline Picard Bloc Drummond, QC

Mr. Speaker, on October 2, 2002, the Globe and Mail revealed that the current Prime Minister raised $1.1 million for his leadership race in 2002. According to the article, the Prime Minister quietly published a partial list of contributors on the Alliance's website. The list only includes contributions in excess of $1,075.

Motions in AmendmentCanada Elections ActGovernment Orders

4:15 p.m.

Liberal

Keith Martin Liberal Esquimalt—Juan de Fuca, BC

Mr. Speaker, does my hon. colleague think there are a couple of misleading aspects that the Conservative government is pushing forward with respect to this bill? I will refer to the two most misleading ones.

The government is suggesting that under the current law regarding political financing, loans are allowed to be made in secret so Canadians are kept in the dark, when the reality is that under the current law the details of all loans must be publicly disclosed.

Does the member not agree that under the current law, not the proposed law but the current law, loans cannot be used to avoid donation limits and they cannot be written off without consequences?

Does she not agree that the status quo with respect to the law is actually very good at ensuring transparency for the public?

Motions in AmendmentCanada Elections ActGovernment Orders

4:15 p.m.

Conservative

The Acting Speaker Conservative Andrew Scheer

The member for Drummond has one minute to respond.

Motions in AmendmentCanada Elections ActGovernment Orders

4:15 p.m.

Bloc

Pauline Picard Bloc Drummond, QC

Mr. Speaker, under Bill C-29, loans, guarantees and contributions from individuals could not exceed the limit set out in the Federal Accountability Act, $1,100 in 2007. Only financial institutions—at commercial interest rates—and other political entities would be allowed to lend amounts exceeding that amount. The rules governing unpaid loans would be strengthened to prevent candidates from walking away from their debts.

We agree with these provisions. Quebeckers have always wanted this legislation to be as transparent as possible. We think that the way we do things in Quebec—

Motions in AmendmentCanada Elections ActGovernment Orders

4:20 p.m.

Conservative

The Acting Speaker Conservative Andrew Scheer

Unfortunately, the hon. member's time has run out.

Resuming debate, the hon. member for Winnipeg Centre.

Motions in AmendmentCanada Elections ActGovernment Orders

4:20 p.m.

NDP

Pat Martin NDP Winnipeg Centre, MB

Mr. Speaker, on behalf of my colleagues in the NDP caucus, I am very pleased to join the debate on Bill C-29.

Let me say at the outset that I support the content of Bill C-29. I should point out that it finds its origins in a motion put forward by the New Democratic Party on the Federal Accountability Act which, sadly, failed at the time, but the government revisited the issue and saw fit to introduce the same subject matter in a separate bill. That bill is the one before us today.

We should start with the basic premise that nobody should be able to buy an election in this country. In fact, nobody should be able to buy a politician in this country. We should take whatever measures necessary to take big money out of politics for all the reasons that should be self-evident to those of us in the chamber today or anybody watching.

We only need to look south of the border to see how big money can undermine democracy. I do not want to cast any aspersions on the character of politicians there, but I would point out that it takes a couple of million dollars now to run in any credible way for a seat in Congress. Surely, people can see that if people have to start their political careers owing $2 million, it can, and I am not saying it does but it can, influence the way people make public policy. That is something we want to avoid in this country.

This bill also asks another question, and that is, when is a loan not a loan? I would put it to you, Mr. Speaker, that if a loan is never repaid, it is not really a loan anymore. It is a donation. That is the way Elections Canada views loans that are not repaid. If they are not repaid in 18 months, they become donations.

If a loan is larger than the amount people are allowed to donate and 18 months later it becomes a donation, they have made an illegal donation. There is a contradiction in our election financing laws that cries out to be addressed. This bill does just that.

Looking at the origins and history of this bill, I would like to recognize and pay tribute to the former leader of the New Democratic Party, who most recently sat as the member for Ottawa Centre, Ed Broadbent. A seven part ethics package was put together by Mr. Broadbent which became part of the NDP election campaign platform. It dealt specifically with the idea of election financing loans being problematic in our election financing system. The reason he was seized with the issue at that time is that we all observed the Liberal leadership race.

We became aware that even though the donation limits governing leadership races and other political events were quite rigid, because the very rules the Liberals established placed pretty serious limits on how much could be donated, the loans that were being made were massive. One person alone, the former NDP premier of Ontario, had $720,000 worth of loans from his brother, the executive vice-president of Power Corp. That loan would have to be repaid in accordance with the donation limits, which today would be $1,100 per person per year. We did not see how that was possible.

We were concerned that that loan would be lost in the sands of time without people aggressively policing how loans like that are repaid. People forget about them. Eighteen months later it would fall to the Chief Electoral Officer to follow it up, police it and make sure it was paid back. We are doubtful it happens in that way. This bill would preclude these big loans that are not really loans from undermining democracy and allowing big money to dominate politics once again.

There were other examples, too. Perhaps a more egregious example happened recently with the member of Parliament for Mississauga—Streetsville, who was a Liberal, crossed over to the Conservatives and now has to step out of that caucus as well because it was found that he was circumventing the election financing rules. Even though unions and businesses are not allowed to donate a single penny to finance an election, businesses can lend any number of dollars. In fact in this case, his own car dealership lent $240,000 to his riding association. Surely that violates at least the spirit of the act, if not the letter of the act.

I understand the election financing problems he has now deal more with overspending. I guess he was sitting on such a pot of money he overspent in his election campaign, but I call attention to the flip side of that coin and that is the source of that very money that he overspent, which was a loan from his own car dealership. That is fundamentally wrong.

It gives an unfair competitive advantage to somebody who can find a big corporation, or a big union for that matter, willing to finance him or her to this great extent, when the rest of us are out there scrambling around trying to raise money within the donation limit of $1,100 per year. Surely anybody can see the unfairness and the inequity of a system that would allow big money to dominate politics in that way.

As I said in my opening remarks, nobody should be able to buy an election in this country. It undermines democracy and more important, it undermines the public's confidence in their democratic institutions.

We are in the throes of a graphic illustration of how big money can undermine democracy. To those of us who sit on the ethics committee, and my Conservative Party colleague who is the vice-chair of the ethics committee perhaps feels the same way, if big money is influencing public policy decision making in the form of undue loans or loans that violate the spirit and the letter of the election financing laws, or bags of cash are given to leadership hopefuls or former prime ministers in hotel rooms, the public confidence in their institutions is severely shaken and undermined.

We work too hard to set up the best country in the world to see its democratic institutions undermined by what can be only described as greed by those who are willing to take advantage of loopholes in the election financing laws or in the lobbying registration laws, or the lack of them.

When the NDP was faced with the previous incarnation of this bill, and I believe it was Bill C-54, we spoke in favour of the bill. We note now that the government has introduced three amendments at report stage, two of which we have no difficulty with. We believe they are technical in nature and not of any substance.

The third one we do have a problem with and we will have to serve notice that we will vote against the third recommended amendment at report stage. It is a default mechanism that if the candidate in an election campaign defaults on a loan, it automatically goes to the federal party. We are not in favour of that amendment. We believe it complicates matters. Unless the political party has the right to veto such a loan, it should not be the automatic seconder or co-signer of that loan. It seems to me that it places an undue financial burden on the federal parties.

There are enough illustrations and graphic examples in the country that the general public could relate to this bill. In the spirit of fairness, in the spirit of levelling the playing field, in the spirit of creating an election financing regime where we all have an equal opportunity and we do not have a system that is dominated by big money in politics, that should be our goal. It should be our guiding principle that one of the best things about our election system, I believe, is how egalitarian it actually is.

There was a time when politics was the purview of the well connected, the rich and the powerful. We have a political system where a carpenter like me can aspire to raise the small amount of money necessary to become a member of Parliament. We have schoolteachers, auto mechanics and electricians; I have met many of my colleagues from all walks of life.

That is the system we want to preserve. We do not want to give an unfair competitive advantage to those who happen to know people who could lend them massive amounts of money far and away larger than the annual limit that we have set through the election financing laws.

Motions in AmendmentCanada Elections ActGovernment Orders

4:30 p.m.

Liberal

Francis Scarpaleggia Liberal Lac-Saint-Louis, QC

Mr. Speaker, the hon. member for Winnipeg Centre has a great deal of expertise in these issues, much more than I do because he sits on the committee. However, I have followed the bill and have a deep interest in it.

If I understand it correctly, under the bill, one would have to get a loan from a bank, which I agree with completely. I seem to recall reading a while ago that there was a problem in the sense that some banks were a little shy, maybe, to lend money to political candidates because they did not want to be seen taking sides.

Has a change been made or is an amendment contemplated to the bill that, for example, could force banks to make the loan if the candidate is loan worthy, if the candidate's collateral meets certain criteria?

Otherwise, what I can see happening is the law of unintended consequences where a candidate asks the bank for a loan. The bank says that it does not want to get involved in politics and will not lend them money, but the candidate's competitor, who happens to be a business person, who does a lot of business with the bank and knows the bank manager personally, will get the loan because the bank wants to maintain the long term business relationship.

In all sincerity, would the member comment on that possible scenario and is there any move afoot to ensure that does not happen?

Motions in AmendmentCanada Elections ActGovernment Orders

4:30 p.m.

NDP

Pat Martin NDP Winnipeg Centre, MB

Mr. Speaker, my colleague raises an interesting point, one that the people at the committee have dealt with somewhat. I do not know if an amendment is under way to address that specifically, but I do acknowledge the possibility of a lending institution being reluctant to delve into something where it may be accused of playing favourites or giving advantage to one party over another.

The goal of the bill is to take it out of private hands so individuals or businesses cannot loan in a way that exceeds the donation limits that currently exist in the Financing Act, and also to get away from the idea that somebody's personal connections may be an advantage to he or she.

I accept the valid point that a member of the community, who has a better relationship with the bank, may have an advantage over a perfect stranger who has never had to seek out this kind of loan.

With the bill, we are only saying that it should be financial institutions, credit unions, trust companies, banks, whatever may be able to keep an accurate record of the repayment schedule and to take away the advantage that one may have of getting loans through personal connections, et cetera.

To answer my colleague's questions, I acknowledge it as a legitimate concern. I know of no amendment to that effect being contemplated. I think it is something that would have to be monitored in practice.

Motions in AmendmentCanada Elections ActGovernment Orders

4:30 p.m.

Liberal

Keith Martin Liberal Esquimalt—Juan de Fuca, BC

Mr. Speaker, does my colleague from the NDP not admit that for many years now so-called big money was not allowed legally to fund anybody's political party?

For many years, there have been very strong restrictions and constraints upon funding individuals who are running for federal office, which thankfully sets us apart from the United States, where big money does drive the electoral system to a large extent.

Will he not admit to the House that since he has been here and for many years before that, severe, consistent restrictions on funding have been in place and that this is not the issue whatsoever in our electoral system? It is clean and money does not play a big part illegally to try to affect anybody's—

Motions in AmendmentCanada Elections ActGovernment Orders

4:30 p.m.

Conservative

The Acting Speaker Conservative Andrew Scheer

There are 30 seconds left for the hon. member for Winnipeg Centre.

Motions in AmendmentCanada Elections ActGovernment Orders

4:30 p.m.

NDP

Pat Martin NDP Winnipeg Centre, MB

Mr. Speaker, when the Liberal government did in fact put limits on donations, it left one huge, gaping loophole, which was the loans issue. Businesses and unions could no longer donate to any extent, but they could lend a candidate hundreds of thousands of dollars. They could lend them a million dollars. If the candidate never paid it back 18 months later, it would be deemed a donation. What good is that?

This loophole was screaming out to be plugged, and the bill plugs it.