:
We'll do exactly that, and we'll have that out today.
Colleagues, having said that, then we're going to drift off a little bit. We have a meeting scheduled for Monday, and there have been some requests that we keep the meeting on Monday, and move right into clause-by-clause. If members are willing to do that, then we are prepared to do that. However, I'm going to make a bit of a request. After today's testimony, it makes sense to me that if anyone hears something that would cause them to request an amendment, that we have that amendment to our clerk by five o'clock today.
I'm seeing nods of the head, and we can do that. That would allow us to determine the relevance of the amendment, as well as get them translated, and have them back to everybody for Monday morning's clause-by-clause.
Everybody is happy?
Thank you very much, colleagues.
This morning we'll move right along. I would advise everyone that we have lunch coming, and if we need the time we will continue the meeting, but if we feel that we've wrapped it up we will just enjoy lunch. Our guests today are invited to stay, obviously, and you may actually be sitting in the hot seat answering questions, but please feel free to get up and serve yourselves at that time. We do have this room booked from now until two o'clock, or as close to that as possible, and we will respect question period, of course.
Pursuant to the order of reference of Monday, May 28, the committee will now resume its consideration of Bill , an act to amend the Canada Elections Act on accountability with respect to loans.
I'm going to ask our guests to introduce themselves first. We'll start over here with Mr. Carroll. If you could just introduce yourself, and who you represent, then I will instruct you further.
Mr. Carroll, please.
:
I would like to thank the committee for inviting me to appear before you today. With me is Mr. Jack Siegel, legal counsel for the Liberal Party and a long time Liberal member.
[English]
I won't be offering much in terms of an opinion on the bill, as the Liberal members of the committee are much better equipped to do that than I, but I would like to share a few thoughts on what some of the consequences, intended or otherwise, might be if this legislation is adopted.
Section 405.5, as drafted, prohibits the making of loans or guarantees to registered parties, registered associations, candidates, leadership contestants, and nomination contestants, except where the lender is a financial institution or where the lender or guarantor is a qualified individual who is limited to a $1,000 loan or guarantee—$1,000 adjusted for inflation. In other words, the only permissible loans over $1,000 are to be made by financial institutions, but those institutions are prohibited from getting a guarantee in excess of $1,000. This leaves open the rather substantial question of how to secure such a loan. We would suggest—and Mr. Siegel has confirmed this with counsel for one of the major banks—that it would be all but impossible for a candidate to get such a loan unless he or she can obtain several $1,000 guarantees that the lender is prepared to accept.
We feel that this is completely unworkable in an election period. Each member of the committee will know that on the day an election writ is issued, you want to spend money. You want to buy signs, you want to print literature, and you want to rent a campaign office for which, at the very least, a deposit is going to be required up front. That's more than $1,000, and you will need it right away. There's an exception in the bill, so you can actually lend your own campaign $2,000, but that's still not going to be enough.
If the bank will even consider a loan at all, you will need to collect $1,000 guarantees. But keep in mind that each $1,000 guarantor is then prohibited from making a contribution to the campaign, over and above that guarantee. See proposed subsection 405.5(4), specifically the passage starting with the word “However”.
So you turn to your riding association. It can transfer money to the campaign, after all, in order to pay these expenses. But one had better look first at Elections Canada's information sheet 5. It says at paragraph 19:
A registered association may transfer goods and services and funds other than trust funds to any candidate endorsed by the party with which the association is affiliated and whose nomination has been confirmed by the returning officer.
So the riding association cannot transfer funds to your campaign until your nomination has been confirmed by the returning officer. On the day the writ is issued, there is rarely a returning office that has opened. Even if you can submit papers on that day, the returning officer must validate the nomination papers, including checking 100 signatures against a list of electors. So you have no money available to transfer from the association.
Proposed subsection 405.5(5) provides for loans from registered associations to candidates, but Elections Canada seems consistently to interpret “candidate” in the financial context as someone whose nomination papers have been confirmed. So again, there appears to be a built-in delay.
Your only means of obtaining money right from the beginning of the campaign, then, is by direct contributions to your official agent from qualified contributors. But according to Canada Revenue Agency income tax information circular IC75-2R7,
Official agents can only issue such receipts for monetary contributions received in a certain period. This is the period that starts with the day on which the candidate's nomination has been confirmed by the returning officer, and ends on the day that is 30 days after polling day.
So those contributions will not qualify for a tax receipt until the papers are confirmed. It seems very unlikely that most donors would make these contributions and give up the tax credit.
All partisanship aside, we do not think this works. Candidates do not typically file their papers at the very beginning of a writ period. After all, in a minimum five-week campaign, they have until the Monday that is three weeks before election day to file. It is certainly the experience in our party that an awful lot of candidates do not file until close to the deadline. In the absence of loans—and we ask the rhetorical question of whether an extension of credit might constitute a loan within the meaning of the bill—the necessary money to operate a campaign at the local level may simply be unobtainable for the first two weeks of a campaign.
And then, please consider the registered parties. The loan guarantee problem is not an issue, since the chief agents of most major parties guarantee campaign loans secured against the rebates that the parties will ultimately receive. And the rebate money goes to and flows from the chief agent of the party. Three of the four parliamentary parties represented here have chief agents that are corporations. They cannot issue guarantees under this proposed legislation. But surely each have good lawyers who can structure the loan security so that it is not a guarantee.
But wouldn't that amount to doing indirectly what you cannot do directly? If so, then could that be a violation of section 405.2 of the act?
Again, all partisanship aside, we are left to wonder if this was really the government's intent and would encourage a careful scrutiny of this section of the bill.
With regard to proposed section 405.7, realistically, the bill is about bank loans over $1,000. We do not know of any financial institution that loans money in the absence of a binding agreement to pay. So although section 405.7 resembles several other provisions already in the act, it appears that the 18-month deeming of a loan to be a contribution will never apply to such loans.
I'm sure that the Liberal members of the committee will be offering other amendments, but there's one that I'd like to suggest to members of the committee for their consideration. In terms of potential amendments, every limit on contributions currently found in the Elections Act is an annual contribution except one, and that's to leadership contestants.
[Translation]
The Liberal Party is perhaps the only one of all of the parties represented here that has run a successful leadership campaign under the rules, but we can assume that all of the other parties will eventually follow suit.
If it is no longer possible for the leadership candidates in Canada to take out a loan, then the solution would be to amend the provisions in the act that relate to contributions made to the leadership so as to harmonize them with the other provisions relating to contribution limits. In other words, there should be an annual limit instead of a limit that would apply to the duration of a party's leadership campaign.
[English]
By allowing leadership contestants to raise money ahead of a campaign so that they don't have to borrow to start their campaigns and so they can regularize their contributions for a post-campaign clean-up of their debts, if any, the loan provision may be less important.
I hope the committee will consider this suggestion. And I understand that a text of the necessary amendment will be provided by Liberal members of the committee at the appropriate time.
[Translation]
Thank you very much.
:
Thank you for inviting us to express our opinions on Bill C-54.
The Bloc Québécois supports the principle of the bill, which sets out the guidelines for loans. The bill will ensure compliance with the rapidly evolving rules relating to federal party funding. It will also prevent any shady or downright fraudulent lending from taking place. However, the application of some of the clauses—because, often, the devil is in the details—is problematic.
There are three types of lenders defined in this bill: the individual, with relevant contribution limits; financial institutions, and political parties.
Over the years, financial institutions have developed scales, rules and risk assessment methodology that can be applied to loan applications for an election campaign or a leadership race.
Proposed subsection 405.7(1) is perhaps the provision that is the most problematic for us. It states that a loan that remains unpaid at the end of the time that is provided for repayment is deemed to be a contribution. On the one hand, we feel that the timeframe in the bill is too short to allow for the refund of election expenses by Elections Canada. There is usually an 18-month deadline. However, a candidate who is waiting for a refund from the Chief Electoral Officer in order to pay back a loan must often wait more than 18 months—and this is a common occurrence, irrespective of the party—because it often takes longer than that for Elections Canada to cut the cheque.
The second problem relates to the fact that the loan becomes a contribution. That is not really an issue for parties or individuals, as long as the contribution limits are respected. But it does become a problem for the financial institution, which is deemed to have made a contribution, even though, by law, contributions by financial institutions are prohibited. So, a loan that was granted in good faith, according to the law, becomes a contribution and an institution ends up breaking the law because the loan that was granted in good faith, with good intent, becomes a contribution. Moreover, any illegal contribution must be remitted to the Chief Electoral Officer, who then remits it to the Receiver General for Canada.
Would a financial institution that granted a loan and that finds itself on the wrong side of the law because the loan becomes a contribution after 18 months remit an amount equal to that of the initial loan to Elections Canada, which will then remit it to the Receiver General, and forego any possibility of recovering the debt? It makes no sense to me.
Proposed subsection 405.7(5), on page 5 of the bill, states that if the candidate is unable to pay, then the party becomes liable for the unpaid amount as if the party had guaranteed the loan. Even though neither the association nor the party were involved in the negotiations for the loan, which only involve the individual borrower and the lender, even though they were not a party to the agreement, if the debt is not repaid, they will nevertheless be liable, as if they had guaranteed the loan. It would be like me telling my banker that the committee chairman will cover me if I default on my loan, even though the chairman was in no way involved in the original transaction.
Our solution would be to delete subsection 5, which ties the party or the association to the contribution. I repeat that if the contribution comes from a financial institution, even if the party becomes the guarantor, it is still illegal.
Thank you.
:
Thank you again for inviting us to appear before the committee.
First, let me say that the New Democratic Party of Canada supports most of the aspects of this bill. We believe that the legislation will help to level the playing field when it comes to our electoral system and more particularly election financing. We are delighted to see that you are studying this issue.
[English]
There are a few items that I'd like to highlight in terms of either possible amendments or suggestions to improve the bill. Some of them have been made by the Chief Electoral Officer, so I won't spend too much time on those, but I'm certainly going to just highlight one of the issues of accessibility.
It has been mentioned before that the guarantee of $1,100 is a real concern, because if you're going to get a loan, and in most cases riding associations will go out and get somewhere between $10,000 and $20,000 on average to borrow, in fact somehow the number of guarantors makes it almost impossible for a bank to be able to do its due diligence of the guarantors and this sort of thing.
Having spoken to Vancity Credit Union, one of the witnesses you would have been able to hear from, they felt quite confident that in fact they would not need the same number of guarantors exactly as you'd find in the total loan. They feel that elements of that don't need to be guaranteed. They feel quite confident with the business case in a lot of ridings, particularly those getting rebates. So in fact that isn't as much of a concern as it might be for a lot of members of the committee.
But I would like to highlight the possibility, if you will, of extending the guarantor to three years of annual contribution limit. So essentially, if it were today, $3,300 could be guaranteed. If for whatever reason there was a default on the loan and that became a contribution, the contribution would then be deemed to be over those three years. So basically a person is not exceeding their contribution limits, but in fact you're allowing a little bit more of a cushion on the guarantees. So it's one of the suggestions that I think you might want to keep open. It doesn't open up the loophole any wider, but at the same time keeps that as a bit of an option.
[Translation]
The second point deals with fairness. I don't spend a lot of time reviewing all of the reports from candidates and riding associations, but I do have access to the loan agreements for all of the parties. There is often quite a discrepancy in the interest rates.
While it is easy to establish the fair market value for an election sign, which is a commodity, interest rates on loans vary according to the individual. I think there should be a clearly-established minimum interest rate.
:
I'll just quickly summarize the point that while fair market value is relatively simple to calculate when it comes to signs and office space and these sorts of things, interest rates have a lot to do with the individuals and the guarantors and a lot of other issues. In fact, sometimes you can consider to be getting a fair market value for an interest rate that could actually be very low, relatively speaking.
To even the playing field, we would suggest that the bank rate plus 1% be the minimum of an interest rate charged for loans in these circumstances so that there aren't those types of loopholes available for people to essentially be making contributions, justifying that somehow they could have had access to a loan that would have had a very preferential rate of interest. So there is, I think, a bit of fairness on that item.
The Chief Electoral Officer has written to you about reporting and making sure that's uniformized in one report, rather than creating multiple reports. I'd strongly recommend that you take that suggestion.
[Translation]
With respect to the responsibility of political parties, as Mr. Gardner has said, a party can become an unwitting guarantor of a debt. I think we should follow Mr. Gardner's suggestion and simply delete this subsection or find some way to ensure that the registered party or association will be aware of the stipulation and agree to guarantee any loan that could eventually become a debt.
This option would ensure that everyone is on the same page. Moreover, when I last appeared before this committee, I strongly suggested that you amend the Elections Act to allow the transfer of campaign debts to a party or to a registered association. This bill would provide us with the possibility to at least transfer a debt arising from a loan, if not a common debt.
Once again, we strongly support this bill and we hope that you will be able to pass it quickly.
:
Thank you so much for inviting Equal Voice to appear before the standing committee. For those of you who are not aware of Equal Voice, if you can just indulge me, I'll take a moment to explain who we are.
Equal Voice is a national, multi-partisan, volunteer-based organization dedicated to the promotion of electing more women in Canada. We currently offer such services as a bilingual online campaign school called “Getting to the Gate”, and an informal speakers bureau. We raise awareness of the issue via public events. We compile federal and provincial election-tracking data, and we are midway through a national public awareness campaign called “changing the face of Canadian politics”. Most significantly, this year on the 25th anniversary of the Canadian Charter of Rights and Freedoms, all federal political parties committed to nominating and electing more women in the next federal election by accepting Equal Voice's “Canada challenge”.
With over 1,500 members and growing, we will soon have chapters in every Canadian province. Even though women comprise 52% of the population, only 21% of elected representatives are women. Canada is now ranked 48th in the world by the Inter- Parliamentary Union for the percentages of women elected to Parliament. The numbers do not need further elaboration, for they speak for themselves.
The issue of women in politics has been thoroughly studied by the House of Commons, the Senate, royal commissions, and many academics. We all know that women are truly numerically under-represented in Canada, and we have to ask ourselves what we are going to do about it.
Equal Voice is a relatively new and growing organization made up mostly of men and women who volunteer their time for the cause. We still have a lot to accomplish in terms of having the resources to respond rapidly to issues such as Bill . Therefore, today Equal Voice will speak to the historical aspects of proposed financial reforms that would benefit women seeking public office.
Equal Voice has yet to identify any academic data supporting the notion that there have been sufficient financial reforms or sufficient moneys for women entering politics, particularly at the nomination stage. More bluntly stated, the issue of money continues to serve as one of the greatest barriers to women wishing to enter the elite level of the political realm.
You are well aware that there have been two royal commissions, the first one in 1970—otherwise known as the Bird commission—and then the 1990 Royal Commission on Electoral Reform and Party Financing. The 1990 commission clearly recognized the effects of unequal financing on women's candidacies and made eight recommendations aimed at rectifying the imbalance. I won't go through them all, because I'm sure you're familiar; however, I will mention the top three: the spending limit should be set at approximately $200,000 for party leadership contests; the spending limit should be set at approximately $5,000 for constituency nomination contests; and contribution for nomination contests should be tax-deductible. And there were a few other very good suggestions.
Equal Voice is eager to hear what others have to say on the proposed amendments. Specifically, we are very interested in how Canada's banking community interprets the proposed amendments, because the banks may very well determine women's access to loans for the purposes of election campaigns. We are also curious to know what Elections Canada has to say about the differences in moneys raised by male and female candidates during the election period. These are but a few of the questions that must be addressed before this bill can be adopted.
A May 1995 study from the Canadian Federation of Independent Business stated that “women seeking financing are refused 20 per cent more often than men; and women are regularly charged a higher rate of interest than men”. It would be interesting to know if this is applicable for women seeking loans for nominations in elections.
Finally, Equal Voice asks why more focus has not been given to the findings of the previous royal commissions. Equal Voice supports initiatives that level the playing field for women, and we'll be clarifying specifics over the next year as we have the opportunity to develop formal position papers on a variety of issues relevant to women's political participation and election.
We look forward to sharing these with you, and with all Canadians, and the international political audience. Equal Voice is raising the profile of the issue of the under-representation of women and continues to build a national, not-for-profit organization to offer practical tools to help women before and after making a decision to run for political office.
We wish you well in your deliberations as you make decisions that will affect all Canadians seeking political office. Women are under-represented, and you have an opportunity to help ease the financial burden for women wanting to get elected, for women who are committed to serving their country.
Equal Voice thanks you again for the opportunity to appear before this committee.
First of all, the information we just received from our witnesses will be in the blues, but we will get them to you as soon as we possibly can. If it would make it easier on colleagues, I suggested five o'clock today for amendments. The clerk has informed me that the work can still be done from her end if they were in by nine o'clock tomorrow morning.
Would that help the colleagues who have raised these points? All right.
For the record, any new amendments, if any, need to be in the clerk's hands by nine o'clock tomorrow morning. We still have the other amendments and they still stand.
As I see no other points of order, we're going to go to our first round of questions.
Colleagues, we will start with a seven-minute round, and we'll begin with Mr. Owen, please.
If we could just keep our questions focused, because of the number of witnesses we have and the time, and if members would pick one of the witnesses or inform the witnesses that you want all of them to respond, that would be very helpful. Thank you.
Mr. Owen.
:
Thank you all for being here at short notice. We realize the complications we're adding to your lives and for your presentations.
I guess the underlying concern that I think all of us have is that we ensure there aren't undue advantages or there aren't ways around contribution limits and practices through the use of loans. That's the general intent of the act, and I think we all support that.
Our concern is the unintended consequence of frustrating a person's ability, compared to another person's ability who may have greater means to actually participate in the process, or of frustrating everybody from effectively taking part in the process by making it too stringent.
Mr. Hébert-Daly, you mentioned that Vancity had mentioned to you—and that's a very helpful transmission—that they would look at situations a little more flexibly than in normal loan transactions. You mentioned particularly that they would look at the rebate potential. Of course, to get a rebate you have to be a candidate and you have to reach a certain threshold. That doesn't help someone in a nomination contest or perhaps in a leadership contest.
I'm wondering, from you and from the others, in a much more focused way than your presentations, which raised some real concerns, both with the misuse of loans but also with the constraints of unintended consequences, potentially, of this, if there is a case to exclude nominations from this process, or is that a sufficient fear? I think one side or the other of it could be that nomination contests don't really cost that much, or shouldn't, compared to leadership processes, for instance.
I'd like you each to just focus, if you have a comment, on the unintended consequence that you most fear from this legislation, perhaps starting with Mr. Hébert-Daly.
:
I have two brief points on it.
On one side of the coin there is a distinction between nomination candidates and election candidates, in that the problems of waiting for your nomination papers to be filed don't exist for the nomination candidates.
As a counterpoint, the other distinction for the nomination candidates is that the candidate in the nomination race who is successful may well go almost immediately into the election campaign already carrying some nomination debt and having the people who might lend them money, or support their borrowing money, with their credit tied up in guarantees that are still capped at the $1,100 level for all purposes. At the same time, it would prevent those same supporters from giving them contributions, because the way that subsection 405.5(4) is worded, if you look at the sum total of loans, guarantees, and contributions, when applying to the contribution limit of $1,100 as it presently stands, gets to be very difficult, if you include the nomination contestants, for them to then turn around and go through the same exercise a second time in terms of accumulating credit.
:
The minimum is the main thing you're driving at. Okay.
The obvious thought that occurs on the maximums, just as a practical matter, is that institutions always have the option of saying they're not going to give a loan. That may be a greater imposition on an individual.
The other series of questions I have to our representatives from Equal Voice are all related. I'm very glad that, unlike other witnesses, you submitted a written presentation. It's very helpful. As we try to take notes, we often can't keep up.
You had a series of bullet points here, and I want to ask you a bit about them.
Bullet number three says that contributions for nomination contests should be tax-deductible. It's an interesting thought. As a practical matter, deductibility tends to mean that those who have a higher average income get a greater benefit. Since I imagine you're saying--I'm not sure--that on average women in Canada have lower incomes than men and therefore what advantages those with higher incomes will not necessarily benefit women, I'm wondering whether you wouldn't agree that some kind of refundable tax credit would actually be preferable.
In going through the bullets you have here—and I recognize the reticence you have about perhaps going into great detail—I noticed, as well, the idea that “childcare and housekeeping should be included as legitimate campaign expenses for both nomination contests and general elections”.
The thought that occurred to me there—and I see your point very clearly—is if you do something like setting the ceiling on spending for a nomination contest at $5,000, and nominations could be reasonably lengthy occurrences in some cases—I wonder if it would make sense to alter that recommendation to something along the lines of “child care and housekeeping expenses should be regarded as additional to other expenses outside the limit”. This is done in elections for the purposes of paying scrutineers. You can pay scrutineers and it's considered outside the limit. Travel expenses, to some degree, are considered outside the limit.
Although you might allow women to write off their child care expenses, in the end I think you can see how you'd be lowering the ceiling they have. If you take the total amount, say $14,000 or $15,000, and it's now down to $5,000, a large proportion of what's available would get eaten up in these expenses. That wouldn't actually level the playing field in the way you're suggesting. I think the overall idea is a good one; I'm just worried about the practical implications of it.
Sorry, I just put words in your mouth, but I was just wondering—
:
Is that all you have to say, Mr. Hébert-Daly?
Mr. Éric Hébert-Daly: Yes.
Mr. Michel Guimond: With respect to Ms. Dion, we would all like to have a 52% female representation in the House of Commons, since women make up 52% of the country's population. I think that is only logical.
I am in charge of my party's nominating committee for the next election. This responsibility was given to me by my leader. It involves a fair number of meetings and discussions to try to interest more women in running for office.
I have two questions for you. First, are you saying that money is the only thing that is preventing women from entering politics? I know that Bill is intended to eliminate financial obstacles. Would more women run for political office if these obstacles were eliminated?
Second, I had a look at the membership of your advisory board. Apart from Senator Lucie Pépin, the former President of the Advisory Council on the Status of Women, who is very credible, do you have any statistics to show how many women are involved in politics at the individual provincial level, or do you only have federal statistics?
:
Thank you very much for both of your questions.
To clarify the first question, which was about the financing and the money issue being the only barrier for women in politics, it's one of many barriers.
The academic data—I'll just make reference to Canadian data—specify the nomination and the financial process as the top two barriers for women in politics. I believe there are many issues that need to be addressed, and I don't think there is necessarily one issue that's going to solve this for getting more women in politics. A lot of things have to happen. Improvements have to be made on a lot of different issues to really make the big difference you're looking for.
On the second question that you had, with regard to the provincial numbers of women in politics, yes, we do have those numbers on our website. When we first started Equal Voice we were really looking at the federal numbers. It's really a matter of capacity, and over the last few months we've had people coming to us with the expectation that we are to provide provincially for the data, and now there's the expectation of municipal as well, considering that there have been some changes at the municipal level.
We're going to do and grow as much as we can, but we understand that the Canadian public is starting to look toward Equal Voice as a really good reference point for getting the data on women in politics. The provincial data is there.
I would like to thank all of the witnesses for coming. It was a very short timeline, and I realize that probably a greater capacity exists at each of the parties than it does at Equal Voice. You are a very important component, and I thank you very much for coming. It was one of the things that our party felt was really important.
I know Judy is very passionate about this issue, as I think most female colleagues are—indeed, a lot of male colleagues are—about getting better representation.
I thought it really interesting when Ms. Wicks was talking about child care. It sounded distinctly more expensive than the $100 a month, but that's getting a little partisan, so I'll skip over it.
I really wanted to ask the party representatives about an issue that's been touched on several times, and that's the loan reverting to the association. Am I to go back and tell my riding executive that if I were able to secure a loan and then, for whatever reason, defaulted on it, they are personally responsible? Or is it looked at as a corporate entity? Exactly what kind of exposure are we now subjecting everybody's riding executive to—is it the president, is it all the table officers, is the treasurer? Do we have any idea what the ramifications would be at that level?
:
Thank you, Mr. Chairperson.
Yes, as Karen Redman said, I feel very passionate about this issue. I've been working in this area of women in politics for 30 years. I started off 30 years ago when Eric was just a wee lad, working in his office, as the women's organizer for the NDP. We as a party have been working very hard ever since to try to reduce the barriers, and to deal with those at every level, and I think we're making some progress.
We've made progress at the candidate level, where we've agreed that there has to be a ceiling on what you can spend as a candidate, and we have put a ceiling on the donations you can take in, because that's the way to have a level playing field. Now we're trying to say we have to do this at the nomination level, whether it's a nomination for party leadership or a constituency.
We have a proposal here that appears to deal with one part of the problem, to put a limit on the loans. Eric, in your brief you actually mention that this helps to deal with a difficult problem and to level the playing field, particularly for women and other financially disadvantaged groups. So I'd like you to explain a bit about how you see this, and why. And then I'd like to ask the other party representatives if they agree that this bill will actually help remove barriers for women and help them enter politics.
:
I'm wondering if I could try this.
I absolutely agree with the goals you're putting forward. Not only am I a member of the Liberal Party, I'm a member of Equal Voice. But it seems to me that in order to get there in this legislation, if you start broadening the scope and put a $5,000 cap on it, you're restricting everybody's ability to upset the apple cart. If you don't have enough financial resources in a campaign—and this is really reflected in municipal elections, certainly where I come from in Toronto—you can't overturn the status quo very readily with very low spending limits. You need a superstar with a huge profile, or incumbents just keep winning.
In the federal dynamic, we have the party shift. But past candidates I think are going to be favoured, because they're better known, by and large, if you limit the spending too much, or the access to money.
What's more, I see this legislation pretty much as gender neutral. In bringing down the level of access to funds, you equally clip the wings of the women who have financial resources as well as the men. There may be some numeric differences as to how many of them, but at the same time there are women who absolutely have that access who aren't going to be able to make use of it to get there.
And I'm having enough trouble right now recruiting female candidates. I don't need any more barriers.
:
Mr. Siegel, it has been mentioned that banks would not necessarily be drawn to making loans or handling all the paperwork in this. If we look especially at proposed subsection 405.5(4), because of the individual's—whether it's a loan, whether it's a guarantee, a surety, or the individual's contributions, all within the limit—Would you explain to the committee where you see a major problem in that sense? And how would banks know if they're participating in something illegal without having a detailed statement from the guarantor? Because the bank has no way of knowing if he's already given a contribution of
x number of dollars. The bank has no other way of knowing if he's already endorsed somebody else. I have a suspicion that if I or a candidate were to go to a bank and request a $50,000 loan, banks wouldn't necessarily be interested in handling 50 guarantors.
So we'll start with you, Mr. Siegel, and maybe you can answer for everybody else.
[Translation]
Mr. Chairman, my question is for Mr. Siegel, but Mr. Gardner and Mr. Hébert-Daly are also free to respond.
According to proposed subsection 405.5(4), contributions, guarantees and endorsements must respect the limits that apply to an individual. How will a bank go about determining that the individual who guarantees a loan is not acting illegally, since the bank has no way of knowing if this individual has already contributed an amount equal to the limit or has already acted as a guarantor for another candidate?
If a candidate is asking for a $50,000 loan, a bank will not necessarily want to have to deal with the paperwork for 50 individual guarantors.
I would ask Mr. Siegel to begin, because he is the one who looks most like a banker, even though he seems rather reluctant.
:
Under Bill , the banks, being somewhat conservative in their practices, pulled away somewhat, certainly in my experience, from their generosity in the political process. That was not only because their political giving was so limited but was because the status quo, as it stands today, and in the absence of this bill, is that a loan becomes a contribution if it defaults. They can't just be generous and write it off in accordance with their practices, which is one of the exceptions, in which case somebody is going to scream about who gave the politician a break when they do write it off.
There was a very real concern under Bill about not getting into the situation of becoming an illegal contributor or taking a guarantee that made somebody an illegal contributor because their guarantee did convert anyhow, if called upon, into a contribution.
So the problem already exists. This legislation.... And I did, when it was introduced, call a friend who works for one of the banks. His answer was that there's just no way he'd be recommending to his client that it engage in any loans here. And the point we discussed was just that of the guarantee, the logistical problem of 50 guarantees, and how much paperwork that is for a $50,000 loan over a short term. There's not much profit in those loans, yet you're going to put a lot of person power into it.
But over and above that problem is the illegal guarantee, because the guarantor also made a contribution to another candidate in another riding, unbeknownst.... You're all innocent in doing this. And the unsophisticated but generous person doesn't even realize that he or she has overstepped. Is that guarantee, being an illegal guarantee under this legislation, an enforceable guarantee? The bank has no way of knowing the answer to that question. They don't want to find out by litigation. We lawyers charge enough that it's going to cost them more than any margin or risk they had on the table to begin with.
It's only one conversation, but if you can ask the banks—and I can understand their lack of great desire to get up in public and talk about what they will or won't do in the political sphere—whether they are really anxious to do this business under these terms, I strongly suggest that the answer is going to be “not really”.
:
Essentially my answer is similar to Monsieur Gardner's. In fact, it's not up to the bank to govern the Elections Act, it's up to Elections Canada to do that. Just the same as if somebody votes twice, you don't expect anyone else to look after that, it's the responsibility of the commissioner. So I think that's the most important thing.
The other thing is, and again in terms of guarantees, this comes back to the rebate assignment in large part as part of the answer to this question, and that is where I think most ridings and most campaigns are going to find themselves relying on that guarantee.
There's also, frankly, the reality that our ceilings are low enough, I think. In the opinion of the party, we think the ceilings right now are low enough that in fact it is possible to raise the amount of money that you need throughout the year, throughout the period of time that you have between elections. Although elections are happening more frequently than they probably used to, despite that, there's still enough time to be able to raise the sufficient amount of money. So actually loans may not even be necessary, and that's the hope of all riding associations in campaigns.
We don't always work very hard to do that, unfortunately, but that is certainly one of the answers to how we get this accomplished.
:
I just want to go back to something Mr. Siegel said, because I think it's very important. It's the fact that, despite some people's interpretation and assumption that this may bring the barriers down for women, indeed it is largely gender neutral.
I know that the Equal Voice witnesses have talked about doing good research, and in the Prime Minister's task force for women entrepreneurs, which was about five years ago now, we did extensive research. What we found was that banking and financial institutions treated men and women equally badly if they had no credit rating and they had not amassed assets. Women generally are disproportionately represented in that area.
So I still do hold one of the concerns that there may be unintended consequences to women that, despite the fact that this largely is gender neutral, will actually negatively or could prospectively negatively impact women.
It seems to me that one of the areas one can't cover off quite as neatly with Mr. Hébert-Daly's comment about the ceilings being low enough is really that of leadership. It seems to me that the whole issue of leadership is another category that's different from whether or not we run as candidates, notwithstanding the incumbency factor and other things that have been said. That does seem to me to be impacted, again, disproportionately, in a way that I don't think the act covers off to my satisfaction.