Strengthening Accountability through Democratic Reform

May-8-07

New law would abolish large political loans from wealthy individuals

Canada’s New Government is moving forward on its commitment to eliminate the influence of big money in the political process with tough new regulations on political loans. This follows reforms contained in the Federal Accountability Act (FAA) that restrict political donations.

The Accountability with Respect to Loans Bill:

  • Mandates the public disclosure of all loans to political parties, riding associations, candidates, and leadership contestants. Information such as interest rates and the identity of lenders and loan guarantors would be accessible through the Elections Canada web site;
  • Dictates that larger loans can only be made by financial institutions (at commercial rates of interest) and other political entities;
  • Holds riding associations responsible for unpaid loans taken out by their candidates – ensuring candidates cannot walk away from unpaid loans;
  • Bans unions and corporations from making loans to political parties, in line with the contribution rules contained in the FAA; and
  • Restricts personal loans to the annual donation limit established by the FAA ($1,100 in 2007).

This Bill is part of the Government’s push to strengthen accountability through democratic reform. Our law on fixed election dates (C-16) recently received Royal Assent. The Liberal-dominated Senate, however, continues to block passage of a bill that would fix Senate terms to eight years (S-4). In the House, Liberals MPs continue to move slowly on a new law that would formalize the Senate election process (C-43).

These proposed rules on political loans follow a Liberal leadership race which saw candidates accept over $3 million in loans. Stéphane Dion himself was lent almost half a million dollars from a handful of wealthy individuals with no guarantee that they needed to be repaid.

After 13 years of Liberal scandal and inaction, Canada’s New Government is moving forward to provide Canadians with clean, accountable government.