GOVERNMENT OF CANADA INTRODUCES LEGISLATION TO STRENGTHEN ACCOUNTABILITY FOR POLITICAL LOANS

April 28, 2009

The Hon. Steven Fletcher, Minister of State (Democratic Reform), today announced the introduction of legislation amending the Canada Elections Act to strengthen accountability with respect to political loans. The legislation is an important part of the Government’s agenda to strengthen accountability and democracy in Canada.
 
“This legislation is one more step the Government has taken to improve transparency and accountability in political financing,” said Minister Fletcher. “Once this Bill is passed, we will have a tighter system of political financing that will limit the influence of wealthy individuals on the political process.”
 
The bill ensures that the treatment of loans is consistent with the higher standards of transparency put in place for political contributions by the Federal Accountability Act, which was passed in December 2006.
 
The proposed changes are fourfold:
 
The bill would establish a uniform and transparent reporting regime for all loans to political parties, associations and candidates, including mandatory disclosure of terms such as interest rates and the identity of all lenders and loan guarantors.
 
Unions and corporations would now be banned from making loans to political parties, associations and candidates, consistent with their inability to make contributions as set out in the Federal Accountability Act.
 
Total loans, loan guarantees, and contributions by individuals could not exceed the annual contribution limit for individuals established in the Federal Accountability Act ($1,100 in 2009).
 
Only financial institutions (at fair market 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.
 
The bill is consistent with a recommendation from the Chief Electoral Officer of Canada.  It reflects a legal approach to political loans already in place in several provinces such as Ontario, Quebec, Manitoba, Alberta and Newfoundland and Labrador.