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House of Commons Hansard #150 of the 39th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was loans.

Topics

Canada Elections ActGovernment Orders

4:15 p.m.

Bloc

Marc Lemay Bloc Abitibi—Témiscamingue, QC

Mr. Speaker, I listened carefully to what my Conservative colleague said, and to my Liberal colleague's response. I must admit that I had some trouble with the member's response, not the Conservative's for once, even if his question, after taking a few detours, was difficult.

I have a question for my colleague. Does he not think that this is a misappropriation of the law? The person who discovered this is brilliant. Since I am a lawyer, I like to dig around sometimes. So I think it was pretty brilliant.

Someone borrows $100,000 from one of his friends who has a business. He runs in the leadership race and either gets elected or not. Let us say that he is elected leader. He borrowed $100,000 here, $200,000 there and $300,000 from someone else. He owes about $800,000 or $900,000, and he decides that he will not pay them back. They go back to those who had loaned him the money.

Do you not think this seems a little like a conflict of interest? When he is potentially elected prime minister, he will owe money to his creditors. Do you not think the Conservative amendment is opportune, and that they came up with this proposal to avoid this appearance of a conflict of interest?

Canada Elections ActGovernment Orders

4:20 p.m.

Liberal

Stephen Owen Liberal Vancouver Quadra, BC

Mr. Speaker, it is a confusing area and we need to manoeuvre through it quite carefully.

The point is that under Bill C-54 if there is a guarantor for a loan of $100,000 from a financial institution to a leadership contestant and that money is not repaid and the bank goes to the guarantor, that does not absolve the leadership contestant from having to obey the election contribution laws.

In my understanding of it, and I would like this to be part of the debate, there would still be the obligation on the political contestant to convert the money that he or she spent during the leadership or nomination process or whatever within 18 months to something that fits within the Federal Accountability Act, in this case individual contributions of $1,100.

I would be very concerned if I am wrong but I do not think I am wrong in saying that the political contestant would not be absolved from responsibility to convert that loan into contributions within the set limits. I think that is true now, let alone under this new bill.

Canada Elections ActGovernment Orders

4:20 p.m.

Conservative

Mike Wallace Conservative Burlington, ON

Mr. Speaker, I listened to the member's speech, in which he talked about a number of issues, and I appreciate the questions from the hon. member from the Bloc on this particular topic, but I am still not absolutely clear.

The member said that some of the things in the bill are in the right direction, that it might take some amendments and so on and so forth. I like to be clear and I think Canadians like to be clear. The hon. member has read the bill and knows what we are trying to do. I cannot figure out whether the Liberals are interested in supporting this in principle and sending it to committee for further amendments or not. I would like an answer to that question.

Canada Elections ActGovernment Orders

4:20 p.m.

Liberal

Stephen Owen Liberal Vancouver Quadra, BC

Mr. Speaker, the answer to that question will come during the vote at second reading. I am sure the hon. member would not be suggesting that we forgo the debate, that debates are irrelevant and that none of us would change our minds or accept new information during the debate.

Liberals take debate very seriously. We will all listen very carefully to each other in the House and make our decision known once we have more information through debate.

However, I can say that the official opposition is very supportive of accountability and transparency in the election loan aspect of political financing, as well as every other aspect of political financing. I am sure that if this bill can be improved, then it will be approved.

Canada Elections ActGovernment Orders

4:25 p.m.

Bloc

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

Mr. Speaker, it is my pleasure to speak to Bill C-54, An Act to amend the Canada Elections Act, which specifically addresses accountability with respect to loans. The Bloc Québécois supports this bill, which seeks to prevent individuals from bypassing campaign financing rules.

As we all know, this bill seeks to correct and clarify a few things that Bill C-2 left out. Members may recall that Bill C-2, which the government touted as its key piece of legislation, as the foundation for cleaning up campaign financing and governance, had a number of shortcomings that had to be rectified. Among other things, Bill C-2 introduced new restrictions on campaign contributions, limiting any individual's annual contribution to a registered party or candidate to $1,100 and prohibiting contributions from unions and businesses.

As unbelievable as it might seem, individuals could still get around these restrictions by taking personal loans. For example, several candidates in the recent Liberal Party of Canada leadership race took out big loans from individuals and financial institutions. Bob Rae, who was defeated by the current leader of the official opposition, owes $580,000 to John Rae, the vice-president of Power Corporation. The current leader of the opposition borrowed $430,000. The current deputy leader of the Liberal Party borrowed $170,000, and Gerard Kennedy borrowed $201,000. The cunning, discreet use of loans gave candidates access to enormous sums of money.

Some may be tempted to question the figures I just mentioned, so I will reveal my source, which was a table printed in La Presse on November 18, 2006.

This bill will also rectify another problem with Bill C-2 on government accountability. During the study of Bill C-2, it became clear that the Conservative government was much more interested in passing the bill quickly than in correcting the kind of ethical problems that have plagued both this government and its predecessors.

I would remind the House that, at the time, the opposition parties, the media and the Democracy Watch group raised the issue and the government refused to act. This bill corrects the problem of loans that circumvent limits on political contributions. I will probably not have enough time to cover both points in great detail, but I would like to emphasize that we are not satisfied with what the Conservatives have done about protecting whistleblowers and in terms of reforming the Access to Information Act.

As for protecting whistleblowers, as we all know, during the last election in January 2006, the Conservatives made a number of election promises dealing with this issue.

These aspects were not included in the accountability act. Allan Cutler, one of the whistleblowers originally involved in the disclosure of the sponsorship scandal and a former candidate for the Conservative Party during the election, was somewhat critical of Bill C-2. Yet, Allan Cutler was an ally of the Conservatives. 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.

Bill C-2 has another flaw that has to do with the Access to Information Act. I would remind the House that, on April 5, 2005, the Liberal government presented a discussion paper on access to information reform. That paper was criticized by all observers, including the Conservative Party. In addition to doubling the minimum administrative fees required of the public, the bill introduced by the former Prime Minister, the hon. member for LaSalle—Émard, maintained all the exceptions included in the act. The Liberal Party never managed to bring about a viable reform of access to information, despite its 13 years in power.

The Conservative government promised during the last election campaign—we remember the holier than thou promises of this government—to reform the Access to Information Act. This is what was said at the time:

A Conservative government will:

Implement the Information Commissioner’s recommendations for reform of the Access to Information Act.

We are still waiting for this reform. The truth is—in this case and so many others—that once in power, the Liberals and the Conservatives are one and the same. When they are in the opposition, the Conservatives criticize the Liberals and make a big fuss about ethics and governance. Once in power, the Conservatives use pork barrel politics and put both hands in the cookie jar, as my grandmother used to say.

The information commissioner recently observed that this is a common trait in all governments. He also said that the reason we need to take action instead of conducting more studies is that governments continue to distrust and resist the Access to Information Act and the oversight of the Information Commissioner.

The proposed changes are fourfold. First, the bill would establish a uniform and transparent reporting regime for all loans to political parties, including mandatory disclosure of terms and the identity of all lenders and loan guarantors.

The second change proposed by this bill is that unions and corporations would now be banned not just from making contributions as set out in the Federal Accountability Act, but also from making loans.

Third, total loan guarantees and contributions by individuals could not exceed the annual contribution limit for individuals established in the Federal Accountability Act, namely $1,100 in 2007.

Only financial institutions, at commercial rates of interest, and other political entities could make loans beyond that amount. Rules for the treatment of unpaid loans would be tightened to ensure candidates cannot walk away from unpaid loans: riding associations will be held responsible for unpaid loans taken out by their candidates.

In conclusion, Mr. Speaker, I have to say that the Conservative Party is not a bastion of transparency, even though it is the party you belong to. You sit in that chair as the guardian of democracy and the person who makes sure debates are conducted properly. I look in your eyes, and I know that you cannot corroborate what I am saying and that, as deputy speaker, you cannot openly support what I am saying. But since you are a responsible member, I am certain that you would agree with me that the Conservative Party is not a bastion of transparency.

In a few short months, this party has built up a track record that shows a lack of political will to obey the rules and put an end to what Mr. Justice Gomery called the culture of entitlement. Besotted and obsessed with power, we come to believe that the money entrusted to us belongs to us personally. It is as though we were running our own business.

I am sorry, but that money is entrusted to us as managers, custodians of the taxes Canadians pay, and it belongs to the taxpayers, who are sick and tired of paying taxes.

In Quebec, we had to file our federal and provincial income tax returns by May 1. I am sure that most of the people who are watching are tired of paying taxes and feel that they pay far too much for the services they get in return.

Public money, taxpayers' money, must be managed openly and transparently. Denouncing the sponsorship scandal that involved the Liberal Party, Mr. Justice Gomery said that it was time to do away with the mentality behind the culture of entitlement and the attitude people in government have that they can do anything they want and they do not care about the people. This is not the way things should be.

There is a proverb that says that he who lives in a glass house should not throw stones. I would like to point out that the current Prime Minister, leader of the Conservative Party, admitted, in December 2006, that he omitted to disclose to the Chief Electoral Officer the collection of hundreds of thousands of dollars because he believed they represented registration fees paid by Conservative delegates attending the party convention in May 2005. The party was forced to record the registration fees for the convention as donations. The report states that the party then discovered that three delegates, including the Prime Minister, had exceeded their annual limit of $5,400 in contributions to the party. Consequently, the Conservative Party was forced to return $456 to the Prime Minister and two other delegates.

There is something else. This government denounced the lobbyist culture associated with the running of the Liberal Party. In and of itself that is a good thing. However, we must recognize that when the Conservative Party was in opposition with us, it denounced this culture that sought to enrich lobbies and the fact that the Liberal Party paid more attention to lobbies than to citizens. We agreed with our colleagues from the Conservative Party when they were in opposition.

However, once in power, they did the same thing. I will provide two small examples. With regard to the current Minister of National Defence, I do not know what happened but, after the opposition asked questions about Afghanistan and the mistreated and tortured Taliban prisoners, he lost his voice. We know that a good dose of laryngitis lasts a few days.

There are great medications for this, and eventually the laryngitis goes away. The Minister of National Defence lost his voice three weeks ago. This is worrisome. What is going on with the Minister of National Defence? Why does he not want to answer our questions? If he is no longer able to do his job, the Prime Minister should seriously consider replacing him. He is a completely useless minister. We have to wonder about the wisdom of the Prime Minister's decision to appoint a former lobbyist as head of the Department of National Defence.

Let us remember that when he was a lobbyist with Hill and Knowlton, he spent a decade working for the largest military equipment, arms and weapons dealers. His clients included BAE systems, Raytheon Canada and General Dynamics. He is now responsible for awarding military contracts worth about $20 billion. Let us remember the tour taken last year when Parliament was not in session. They went to Fredericton and announced the purchase of aircraft. They went to Valcartier and announced the purchase of jeeps. They went to Ontario to make other announcements. They went to Alberta or Manitoba, I cannot remember which, and made even more announcements.

They did all of their shopping without engaging the House of Commons in debate. It just so happened that they waited until the House adjourned for the summer to go on a big tour making military spending announcements. The chief lobbyist is also the Minister of National Defence, who awarded over $20 billion in military contracts.

Can we be sure that the Minister of National Defence, who has remained silent on the subject, is working in the best interest of taxpayers rather than in the best interest of his former clients? The question is a good one, and the answer is obvious.

What is more, the current Prime Minister made Sandra Buckler his director of communications. The auditor general produced a devastating report about the Royal Lepage relocation services saga. Apparently, in 2005, Ms. Buckler, a lobbyist, met with members of the Standing Committee on Public Accounts, who had serious doubts about how Royal Lepage was using public funds. As a reward, the Prime Minister made her his director of communications. One might well wonder whose interests were being served in the Royal Lepage relocation services file: Ms. Buckler's or those of taxpayers?

One might also question contracts awarded to political friends. The Conservative government awarded a communications contract to Marie-Josée Lapointe, who was part of the current Prime Minister's transition team. One might also wonder about partisan appointments and appointing judges and immigration commissioners on the basis of their political beliefs. Much could be said on the topic.

Unfortunately, I have only about a minute left. I will have to wrap things up unless I have the unanimous consent of the House to speak until it is time to vote. I would be happy to do so, but I believe it is my NDP colleague's turn to address the House.

In conclusion, the Bloc Québécois supports this bill. I think that the government should seriously consider doing something about certain major loopholes that are still around despite Bill C-2.

Canada Elections ActGovernment Orders

4:45 p.m.

Conservative

The Acting Speaker Conservative Andrew Scheer

It is my duty pursuant to Standing Order 38 to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Don Valley East, Afghanistan; the hon. member for Gatineau, Official Languages.

Questions and comments, the hon. member for Burlington.

Canada Elections ActGovernment Orders

4:45 p.m.

Conservative

Mike Wallace Conservative Burlington, ON

Mr. Speaker, I appreciate the intervention by the member opposite on the topic we are discussing, accountability with respect to loans, but if people had tuned in to listen to the member half-way through his 20 minute speech, they would not have had a clue about the bill we are debating. The member went off onto other tangents, which he, like any other member, is entitled to do, but I would like to bring us back to the debate on the bill.

The bill we are debating today deals with loans for those running for office and its principles are fourfold. It establishes a uniform and more transparent reporting regime for all loans to political parties, associations and candidates. Unions and corporations will now be banned from making loans to political parties, associations and candidates, consistent with the Federal Accountability Act. Total loans, loan guarantees and contributions by individuals cannot exceed the annual limit, which in 2007 is $1,100. Only financial institutions can give loans at commercial interest rates to political parties. The rules for the treatment of unpaid loans will be tightened to ensure that candidates cannot walk away from unpaid loans. The actual riding associations will be responsible.

That is really what we are debating today. I know that my colleague from the Bloc started by talking about that. I just want to be on the record to make sure that people watching or listening at home will understand what we are talking about today. I also want to confirm that the Bloc is supportive of those four principles or changes. Is there anything in the bill that it is not supporting?

Canada Elections ActGovernment Orders

4:45 p.m.

Bloc

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

Mr. Speaker, as I began, I stated that the Bloc Québécois is in favour of the principle of this bill. However, I would like to tell my hon. colleague that this government's approach to ethics and transparency is like an unfinished symphony. They can pat themselves on the back and say that they got this, that and the other thing done, and that they made some corrections thanks to Bill C-2. They can say such things, but I would like to enlighten my colleague. I say it is an unfinished symphony because it still has some major shortcomings, particularly concerning whistleblower protection. Allan Cutler said so himself. He was a candidate for the Conservative Party. He was a whistleblower. He was the first to see the problem and stand up. We would expect this government to include provisions for whistleblower protection as well as real reforms to access to information, as called for by the Information Commissioner.

I can repeat it again for the member. Yes, the Bloc Québécois is in favour of the principle of Bill C-54 concerning loans. Yes, we agree that there were some improprieties during the last Liberal Party leadership race. Yes, we agree, but we think the Conservatives must also take a closer look at themselves. Perhaps things have happened in the past on their side.

Canada Elections ActGovernment Orders

4:45 p.m.

Bloc

Marcel Lussier Bloc Brossard—La Prairie, QC

Mr. Speaker, I thank the member for Montmorency—Charlevoix—Haute-Côte-Nord for his speech on C-54. I would like to hear his comments on what the House Leader told the newspapers, when he said that his government did not intend to table a retroactive bill.

Is there not some justification for making retroactive legislation regarding these contributions?

Canada Elections ActGovernment Orders

4:50 p.m.

Bloc

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

Mr. Speaker, this question is being asked by a member who is serious, a member who works hard. In our case, unlike the questions posed to a minister by a member of the party in power, it is not a question that I had anticipated. My colleague, even though he belongs to the same party, did not send me his question in advance.

Those listening in the galleries or elsewhere and who are observing question period should understand that when a Conservative member poses a question to a Conservative minister, the minister knows he will be asked a question and he often reads the answer. That is what we call a softball question, which is not the case for my colleague's question and I will take the time to answer.

There should be a retroactive review of what happened because that confirms that the past will never be sanctioned and that wrongdoing may have been committed. Given that there was not an applicable law, we just keep going and the situation is not corrected. It is something that we should seriously consider. My colleague from Brossard—La Prairie, who is an excellent MP and very active in his riding—I have heard what people say about him—was right to raise this question.

Canada Elections ActGovernment Orders

4:50 p.m.

Conservative

The Acting Speaker Conservative Andrew Scheer

Questions and comments, the hon. member for Burlington

Canada Elections ActGovernment Orders

4:50 p.m.

Conservative

Gary Goodyear Conservative Cambridge, ON

Is it a prepared question?

Canada Elections ActGovernment Orders

4:50 p.m.

Conservative

Mike Wallace Conservative Burlington, ON

No, Mr. Speaker, it is not a prepared question. It is interesting that the Bloc member brought up the prepared question in question period, something those members will never experience, because as we know the Bloc will never form the government of this country. That party is not interested in being part of this country. I am not sure exactly why those members are here.

There is another part of this that I would like to comment on. I happen to be on the Standing Committee on Access to Information, Privacy and Ethics. Since my colleague brought it up, when we tabled the Federal Accountability Act in this House we also tabled the open government proposal, which was proposed by the former information commissioner, and a response paper that went with it. That was referred to our committee.

It was the Bloc members who said to our minister that they did not want to deal with that. The issue was that they wanted the minister to go away and do something, even though this House had committed a piece of potential legislation, or at least a framework for it, to that committee for its review. It was the Bloc members who led the charge not to deal with it at that time.

Based on his response earlier today, does the member feel that the members of his party on the ethics committee should change their position and move to review the open government proposal that had been provided to us?

Canada Elections ActGovernment Orders

4:50 p.m.

Bloc

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

Mr. Speaker, I will give the standard answer. The leader of the government often says that committees are masters of their own procedure. If the members of that committee want to change their position, they are free to do so.

A member asked why the Bloc is represented in this House. My answer is that the Bloc is represented in this House because people in Quebec asked us to represent them and decided that the Bloc Québécois is the only party that can truly defend the interests of Quebec.

The member should pay attention. I am not questioning the democratic choice made by the people of Burlington, in his riding. He won election democratically, and so did the 51 Bloc Québécois members in this House. The member has nothing to teach anyone about democracy. There are Bloc Québécois members in this House because Quebeckers recognized that it is important to have members who can truly defend their interests.

You say that we will never be in power, but you are in power, and people tell us that it is a good thing the Conservatives are in a minority situation. If the Conservatives had a majority, what would they do about the war in Afghanistan and the environment, with all their pro-oil positions and biases? We do not need to take any lessons from anyone on the Conservative side.

Canada Elections ActGovernment Orders

4:55 p.m.

NDP

Pat Martin NDP Winnipeg Centre, MB

Mr. Speaker, I should begin my comments on Bill C-54 by recognizing and paying tribute to the former leader of the New Democratic Party who most recently sat in the riding of Ottawa Centre, because it was he who blew the whistle on the fact that the political donation regime in this country left a loophole that was so outrageous it was bound to be exploited and abused.

Mr. Broadbent had the sense to recognize that even though the amounts of money that can be donated to a political campaign or to a political party had been reduced, by allowing these huge loans, which never really have to be paid back, it was obvious that somebody with a lack of ethical standards would take advantage of that loophole and would begin to act as if there were no financial limitations. I recognize Mr. Broadbent for raising this issue for us in his ethics package.

I am gratified that today we are dealing with a bill in the House of Commons that will close this last remaining loophole, one of the most serious loopholes in our election financing laws, because we start with the basic premise that nobody should be able to buy an election in this country, or a politician, for that matter. When we are dealing with such massive amounts of money, the point that was made by the House leader of the government was that a politician or a political party is going to owe somebody a great deal. They are going to owe somebody an obligation, a debt, and it is not healthy for the interests of democracy to have some corporate sponsor pulling the strings of politicians through this enormous debt of gratitude that is owed. That is the fundamental principle here. That is the direction in which we believed we needed to go.

These loans were a loophole that simply had to be plugged. The most egregious example, I suppose, and what really caught the public's imagination, was during the Liberal leadership campaign. Even though businesses and unions were not allowed to donate a single dollar, they could loan tens of thousands of dollars or hundreds of thousands of dollars, and individuals could loan far in excess of what they were allowed to donate.

Then, through the very loosey-goosey standards and rules that exist in terms of the repayment of those loans, if the loan was not paid back within 18 months it was deemed to be a donation, albeit an illegal donation. We allowed this contradiction to exist in our election finance regime. Some would say it was by design that the rules put in place by the previous government to put limits on election financing left this convenient loophole there, with it knowing full well their people would stumble upon it, seize on it and use it.

The other example that turned people's heads and simply sounded the alarm that this had to be addressed was the member for Mississauga—Streetsville. Even though a business is not allowed to donate anything and a union is not allowed to donate anything, his business loaned the Mississauga--Streetsville riding association $176,000 in one loan, I believe it was, and another $60,000 in another loan.

How can that be? It is a contradiction that we have allowed to evolve, because if that loan is not paid back within the 18 months, it is deemed to be a donation, and then we will have allowed a business to make a donation, which it is not allowed to at all, and a donation in the amount of a quarter of a million dollars, which is clearly in excess of anything contemplated when we set the donation limits for individuals at $1,100 per year.

This had to be done. I do take some recognition of the fact that we played a role in bringing this about. It was the NDP that moved this as an amendment during the Federal Accountability Act debates, but I also caution that we perhaps have not gone as far as we could. There are two things in the bill that worry me somewhat.

Even though we cannot pass legislation retroactively to give us some satisfaction on the debacle of the Liberal leadership loans or the loan of the member for Mississauga—Streetsville, we can have legislation that is retrospective in nature. We can look at ways to address these loans that drew the public's attention to this issue to make sure there is some compliance with at least the existing regime.

The second thing that we find fault with regarding this legislation is we cannot understand for the life of us why the date of implementation will be six months after the bill receives royal assent. My colleague, the government House leader, suggested that perhaps there is a way we could speak to the Chief Electoral Officer and garner support for the idea of a more rapid implementation date. I would urge the government to do so, because as the bill is currently drafted, it is possible we could have another federal election under the current set of rules which allow these political loans.

Now that it is common knowledge that there is no law against lending someone $100,000, even though the donation limit is only $1,100, a lot more people will be doing it if it is allowed. It would be morally and ethically wrong to allow another federal election to take place under the current set of rules. Therefore, I would urge members when the bill gets to committee, to look favourably on the idea of an amendment, which we would be happy to put forward, that the date of implementation should be when the bill receives royal assent.

This is much in the same spirit that we looked at the Federal Accountability Act. We did not see any reason to delay the implementation of the election financing rules associated with the accountability act, even though the Liberal Party urged us strenuously to delay and delay and delay because the Liberals wanted to get their leadership convention out of the way. That is certainly one of the things we would like to see.

I heard my colleague from the Liberal Party try to make arguments against this bill. Even though I do not take this remark seriously, I do give him credit for at least having the courage to try to be creative to find some reason why this bill is a bad idea.

I do have to counter one of the arguments he made which was completely spurious. He suggested that by banning these loans or putting severe limits on these loans, it would actually act as a barrier to those who do not have access to friends with money from entering into politics. It is like arguing night is day, because that is absolutely 180 degrees the polar opposite of what any cursory reading of the bill would tell us. In actual fact, the idea is to take big money out of politics and to take away the unfair competitive advantage that people who are well connected currently enjoy. The idea is to level the playing field.

That was the purpose of Bill C-24, which the Liberals introduced when they first put limits on donations. The idea was to get big money out of politics so that nobody could buy influence. That was certainly the argument put forward under Bill C-2 when we further reduced the donation limits to $1,100.

It is courageous to argue that this is actually the inverse. It takes a lot of guts to stand there and try to make that argument, but we cannot let that go unchallenged. If anything, this is an enabling measure that does level the playing field so that all of us, if we need to borrow money to get our campaign started, have to go to a recognized lending institution. No single person would be able to underwrite or co-sign a loan to an extent greater than the person would be allowed to donate in that year. It is eminently sensible because if there is a default on that loan and the loan becomes deemed to be a donation later on, then the donation would not be in excess of what the person would have been allowed to donate. It seems common sense to me.

A further innovation and protection here is that we do not want the precedent set by Paul Hellyer and the Canadian Action Party to set the tone. In that case, he simply wrote off the $800,000 debt to the Canadian Action Party. We do not want to see John Rae writing off the debt to Bob Rae. We do not want to see Mr. Mamdouh Stephanos writing off the $200,000 debt which was loaned to the leader of the official opposition. That would be fundamentally wrong because then those guys would have made a $200,000 loan which became a donation which they then forgave. Talk about buying influence in a campaign. What about the $100,000 that Marc de la Bruyere loaned to the leader of the official opposition?

We have every reason to believe that the leader of the official opposition will probably pay back those debts because he will have the ability to fundraise within the $1,000 limit and because he is in a fishbowl and everybody is watching what he is going to do with his campaign debts.

What about the losers in that race? For instance, I used the example of John Rae, a senior executive with Power Corporation, being able to simply write off and forgive the $840,000 that he loaned to his brother, Bob, to run in that campaign. That would be a travesty. That would be an absolute abuse of the election financing laws as we know them today.

With this bill, it is deemed that if the loan is not paid back in an acceptable period of time, or the time frame negotiated between the lender, a bank, and the borrower, or 18 months, whichever comes first, it would be the riding association and the political party of the riding association that would have to assume that debt. That would make sense. In fact it would help from an equity point of view for the person borrowing the money, because the person is actually borrowing the money with the guarantor of the political party that the person belongs to. The financial institution would have some comfort. The person would not have to find a financial backer to co-sign that loan; in fact, the person would not be allowed to.

If, as I have done, one needed to borrow $20,000 to get the campaign started, one would need to find 20 guarantors at $1,000 each. No one person could co-sign the loan. That is the way it should be. If the person cannot find 20 people to sponsor his or her entry into politics, perhaps that person should rethink whether he or she should be going into politics or not because the person is not going to get very far anyway.

I think this is eminently fair. It has covered the three conditions that the NDP raised during the debate on the Federal Accountability Act. I completely reject the Liberals' argument that there could be perverse consequences which would limit entry into politics.

Again my colleague from Vancouver Quadra very cleverly planted the idea that perhaps Equal Voice would be disappointed with this initiative, as if this would somehow be a barrier for more women to enter politics. I would argue that the absolute inverse would be true, because this will level the playing field so that well-connected people with corporate sponsorship, like we saw in the Liberal leadership race, will not have a competitive advantage over a woman without those connections. Again it levels the playing field. We have not had any indication how Equal Voice would react to this bill, but from what I know of the people in that organization, I think they would support this idea.

I wish we would not reform the election financing regime in such a piecemeal fashion. There are a number of other things that the NDP has been calling for. One I will speak to briefly is that now that Bill C-16 has passed very quietly and without fanfare over in the other place, it is now law and we have fixed election dates, I believe we should have year-round spending limits. Now that we know elections will be held every four years on a fixed date in the month of October, there should be some regulation on the amount parties can spend on advertising not just during the writ period but outside the writ period as well. That is a necessary natural consequence of having fixed election dates. I would look forward to some movement from the government in that regard.

I also wish we had done something about the age of political donors. I am very critical of the idea that we can actually launder money through our children's bank accounts in a way to exceed the donation limits allowed by law. That seems to be acceptable in that when it happened in the Liberal leadership race and we filed complaints with the elections commissioner, nothing came of it.

I guess if an 11 year old wants to donate $5,000 to a political candidate, nobody thinks twice. When it is twins and they both decide to donate $5,400 each to the same candidate, nobody thinks twice. Throughout the whole country Canadians shook their heads when they saw that. I would like to see us have the courage to move forward and say that this is simply wrong.

It is wrong to launder money through anybody's bank account if the purpose is to defraud the system and exceed the donation limits allowed by law, whether it is one's mother-in-law or brother. A person is not allowed to donate the maximum himself or herself and then sneak a cheque under the table to his or her buddy and say, “Send this along to the Liberal Party for me too”. It is against the law to conspire to defraud the system. We are silent on that and even when we file complaints on that, the elections commissioner seems to be silent on it.

The NDP tried to move an amendment to Bill C-2 which said that underage people could donate money, but if they did, it would be deducted from the total amount their legal guardian was allowed to donate. In other words, if a 14 year old felt strongly enough about politics and wanted to donate $100 of the money he or she earned at the burger joint, more power to him or her, but that meant the child's parents or legal guardians would donate $100 less that year. If people get a tax advantage from being children's legal guardians, they have to be legal guardians in this era of politics unless and until the children reach legal age as well. That would have been a courageous move and would have cleaned up one of those embarrassing situations that we allow in our system currently.

Let me speak briefly about the outstanding issue that we are all worried about, which is the issue of the member for Mississauga—Streetsville, who is not a Liberal any more, but when the loans took place he was. Now he is a Tory.

I do not know how we are going to address this, but we should remind everybody, and maybe through this speech we will serve notice, that no one's sweetheart can bail out somebody like that. If someone borrows $50,000, as many of the people did in the Liberal leadership campaign, and it is not paid back quickly, the candidate cannot pay it off because he or she would be exceeding the limit. The candidate cannot have a guardian angel donor show up out of nowhere and bail him or her out. The money has to be paid back within the donation limits.

The money was raised within the donation limits of the act, which is $1,100 per year. I do not see how some of these candidates are going to do so. The burden of proof is on them to pay it back in compliance with the law. Some of these failed leadership candidates are now raising money for the next federal election and they are still asking people for money to pay off the debt they incurred.

As I say, it is not that tough for the winner to pay off the debt. It is a lot tougher for the losers, the ones who did not win. It has to be the $1,000 limit. We are watching. These people are in a fishbowl and we will be filing complaints. If they do not pay it back at all and it is deemed to be a donation, then what? I will tell the House what.

Under the current election laws, and this should be fixed too, they can take out another loan to pay off the first loan and buy themselves another 18 months. Then the debt gets lost in the sands of time and we will have been complicit with somebody conspiring to defraud the election system. Those are the people on this list that I have right here.

Some of the people in the Liberal leadership campaign might find themselves in that situation. It would be wrong, but they may be leaning that way and our Elections Act is not tough enough to stop that from happening. I was disappointed, in fact I was shocked to learn that would be allowed, that they could take out a second loan to pay off the first loan and buy themselves another 18 months. Who is going to be around to police whether the second loan gets paid off three or five years down the road? This is really not satisfactory.

If we are serious about levelling the playing field, about taking big money out of politics and about making sure that nobody can buy an election in this country, we have to go all the way. We should put together an election financing regime that we can all be proud of. We could be an international centre of excellence. That would make me proud.

I take some pride, as I said at the beginning of my remarks, that it was the former leader of our party, the hon. Ed Broadbent, who brought this issue to light and said, more or less, that no further federal elections should take place until we clean up the election financing regime in this country. The NDP tried to do it during the debate on the Federal Accountability Act. It seemed to take a little longer than we thought to resonate with the ruling party, but it seemed to have at least accepted the need for this now.

We are critical that there will be a six month wait after the bill receives royal assent. We expect this to get a rough ride from the Liberal Party. I am not trying to state the obvious, but if one cannot raise or borrow money, one is not going to be in any hurry to pass this bill.

We hope the Liberals do not stall it unnecessarily, but I think the government should act quickly to take that six month proviso out of the way, implement it as soon as we can, and get it through the House, so that the next federal election can be run with equal opportunity for everybody and that no unfair competitive advantage go to those who might enjoy a corporate sponsor or guardian angel donor.

Canada Elections ActGovernment Orders

5:15 p.m.

Conservative

Gary Goodyear Conservative Cambridge, ON

Mr. Speaker, I was actually trying not to smile because this is serious business, but I do remember when we put in place the rule that one could only contribute $5,400 to a candidate. Of course, then there were those creative thinkers who decided they would shovel the money to their children's trust funds and get little kids to donate their money.

Then we had this issue. Does the member know how to get an $800,000 donation to his campaign? I thought this was extremely creative. How one would do it is to get a friend to co-sign a loan at the bank. The bank would give me the $800,000 as a loan and then I would renege on the loan. The bank would go back to my friend who would pay the bank. Ultimately, my friend never gave me any money. I think that is creative. That is how we skirt the law.

I do not see the bill as piecemeal. I actually see this as continually chasing those creative folks who are intent on bending and violating the rules. I would agree. We have a lot of work to do on this stuff, but I suspect we are going to be doing it again in two years. I just want to get confirmation from the member that he is going to support the bill wholeheartedly and continue to work with us to make sure that we are ahead of these creative thinkers who want to skirt the law and not abide by the law.

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5:15 p.m.

NDP

Pat Martin NDP Winnipeg Centre, MB

Mr. Speaker, it would be morally and ethically wrong to deliberately take steps to circumvent the law, but there are those who unfortunately appear willing, at least in the case of the way that we phrase it, of shaking down children for their lunch money in the last Liberal leadership race. We were all offended by that. The whole country was taken aback.

Canadians did not think that politics had descended to that, but whether one launders money through the bank accounts of one's children or the bank accounts of brother-in-laws or grandmothers, if one is taking steps to circumvent the law so that one can donate more than is allowed by law, that should be dealt with. I think we should swoop down on it and make an example of somebody. I am disappointed how toothless the Elections Act really is.

The Elections Commissioner is supposed to look into these things, but when we file complaints of that nature, those officials seem unable to bring charges or to really bring anybody to task.

In the other context, when is a loan not a loan? If it is never paid back, I guess it is a donation. Businesses and trade unions are not allowed to give a single dollar. We are glad about that, even though the NDP used to get about 18% of our total contributions from labour organizations. When the law came in we said, absolutely, we are in support of that. Let us make it that only individuals can donate money in the election process.

Businesses and unions cannot give a single penny, but the way the law was left by the Liberal government, they can lend $100,000. They cannot donate $1, but they can lend $100,000 or $1 million with a wink, wink and nudge, nudge indicating it really does not have to be paid back. That would be wrong, but I have a good feeling that it is exactly what we are seeing in some situations.

Now that the word is out, that this is in fact legal and I am not saying anybody did anything illegal, that this can take place I am afraid that if we allow another election to take place without plugging this loophole, that many people will take advantage of it. Why would one not if one was that ethically challenged?

Canada Elections ActGovernment Orders

5:15 p.m.

Liberal

Stephen Owen Liberal Vancouver Quadra, BC

Mr. Speaker, I listened carefully to the comments by the member for Winnipeg Centre. I recognize him as being genuinely interested in these issues. I know he wants to ensure that our democratic process is properly financed within strict rules, that those rules are not broken, and that they work toward the public good rather than toward some selected interests.

The member did toss off quite lightly my earlier comment and concern that an unintended consequence of this legislation, if it is not amended and we have to think carefully together how it might be, may be that disadvantaged or otherwise under-represented groups or individuals might be foreclosed from entering initially the political process. They would not have a riding association because they were not elected. They would not be a candidate because they have not won a nomination. They may be going for a nomination or going for leadership, but they do not have sufficient means to be seen as credit-worthy to a financial institution.

While the expressed intention of the bill is to get big money out of politics, I am afraid that there will be some circumstances where only people with big money will get the loans at commercial rates. It will be people with a lot of assets that could be pledged against any loans. It is fine to get $20,000 from 20 individual people for a nomination contest, and that may be sufficient, but it is not sufficient if someone is going into a nine month country-wide leadership event, which is very good for democracy in terms of a constant debate over that period of time, but with 11 different candidates involved.

I know the member for Winnipeg Centre said that he does not take this seriously, but I think it is serious, and we are going to hear about it at committee from some expert witnesses from disadvantaged or otherwise under-represented groups.

I wonder if he can think of some way that we might amend this legislation to prevent that situation from occurring, even if he thinks it is unlikely. I think we will hear it is possible. I wonder if he has any ideas on how to make sure that this barrier to entry does not take place as a result of this legislation.

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5:20 p.m.

NDP

Pat Martin NDP Winnipeg Centre, MB

Mr. Speaker, the member for Vancouver Quadra said that some individuals may be disadvantaged if they are not deemed credit-worthy to a lending institution et cetera. Under this bill, seeing as the ultimate accountability is the political party, if the loan is not paid back, the riding association would then be responsible and then ultimately the political party that the individual belongs to would be responsible after 18 months. That actually creates a more level playing field and perhaps makes the person more credit-worthy.

In the current situation, that same individual, without a great deal of assets who wants to get into politics, would be blown out of the water by a competitor with a corporate sponsor who may be able to make a loan of $100,000. That would not be allowed any more.

Both individuals would have to appeal to the bank on equal footing. I do not think the bank would lend one of them $100,000 and one of them only $5,000. It would probably be interested in looking at them both equally because ultimately the political party would end up paying that back if either of them defaults.

I am not concerned, but I certainly have an open mind. If witnesses come before committee and make that case, perhaps there are things we can do. We are genuinely interested in seeing this bill pass because I believe that in the broader context it would address the need that we identified in terms of leveling the playing field.

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5:20 p.m.

Conservative

Bruce Stanton Conservative Simcoe North, ON

Mr. Speaker, on the question of personal loans from individuals, the member brought up an important point. If the lender was to allow the person who had borrowed the money to not repay the loan, it occurs to me that might set up a situation where the lender might be able to declare that bad debt as a loss. Would there be any way that individuals could somehow use that to reduce their own income tax payable to the government? I wonder if the hon. member could possibly imagine such a scenario.

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5:25 p.m.

NDP

Pat Martin NDP Winnipeg Centre, MB

Mr. Speaker, that is a very good point in that we may have another perverse consequence that someone would be getting a tax break by taking part in this whole charade which undermines the integrity of the Elections Act.

An even further perverse consequence is if one did not pay back the loan should one have to put it down as income the next time one files taxes. Perhaps Bob Rae would have to declare another $800,000 worth of income if he does not pay back the $800,000 to his brother. It is loaded with problems.

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5:25 p.m.

Liberal

Roy Cullen Liberal Etobicoke North, ON

Mr. Speaker, I believe my time is quite limited, but I will try to summarize my views on Bill C-54 in which I am very pleased to participate today.

I guess I come at this particular issue from the point of view of transparency. I think as members of Parliament we should disclose the sources of any funding, the sources of any loans, but I am not particularly excited about the limits.

We introduced in our mandate Bill C-24, the elections financing act. In fact, I was the only member of the Liberal caucus at the time that voted against the bill at report stage. I felt that it was wrong-footed. I understood that the time the need to restrict corporate donations and in fact a group of us tried to work out a compromise and limit corporate donations to $10,000, but that was not to be.

I have in my riding companies that have branch plants and operations across the country. Under the previous regime of Bill C-24, they could donate $1,000 and now they cannot even do that. If they have branch plants they might want to support the political process and give $250 to the MP or the candidate in a certain riding. I think it is unfortunate that we have brought in these limits for unions and business. I do not think it is appropriate.

In 1998 the Canadian banks wanted to merge. They were very anxious to do that. The banks, it is well known, used to provide huge donations to all the political parties and what good did it do them?

I think the idea that corporate donations buy influence is vastly overstated. I totally believe in transparency, but my problem with this particular bill is that it tends to have some unintended consequences in the sense that it might preclude people who do not have access to cash to get involved in the political process and take out a loan.

The current provisions of the legislation already call for them to repay the loans and they have to do it within the context of the loan limits, of the donation limits, so they cannot avoid the donation rules through loans. Therefore, I am not sure what this new bill is all about, other than restating what is already on the books.

The member for Winnipeg Centre talked about the laundering of money. I think that is a pretty strong statement. I know our country has brought in one of the strongest anti-money laundering regimes in the world. If this was a money laundering operation, I would certainly object to it, but I know my colleague from Vancouver Quadra is the expert on this. I know he will be trying to improve the bill at committee.

I certainly hope, when the bill comes back to the House, it will be new and improved and then I will be happy to have a look at it.

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5:25 p.m.

NDP

The Deputy Speaker NDP Bill Blaikie

Order, please. I think I will end the member's speech there. Of course, he will have more time remaining. When the House returns to this particular bill, he will have 16 minutes left to give us the benefit of his views.

The House resumed from May 2 consideration of the motion that Bill C-207, An Act to amend the Income Tax Act (tax credit for new graduates working in designated regions), be read the second time and referred to a committee.

Income Tax ActPrivate Members' Business

5:30 p.m.

NDP

The Deputy Speaker NDP Bill Blaikie

It being 5:30 p.m., the House will now proceed to the taking of the deferred recorded division on the motion at second reading stage of Bill C-207 under private members' business.

Call in the members.