Introduction of the Accountability with Respect to Loans Bill (C-54)

Museum of Civilization

May 8, 2007
Gatineau, Quebec

Good Morning.

It gives me great pleasure to announce that I have just tabled new legislation in the House of Commons titled Accountability with respect to Loans.

This modern, realistic, and effective legislation is the latest step in Canada’s New Government’s agenda to strengthen accountability and democracy in Canada.

This legislation builds on our ground breaking Federal Accountability Act in ushering in a modern era of clean politics.

An era when it will no longer be acceptable for any political entity – including candidates and leadership contestants -- to mortgage themselves to powerful, wealthy individuals.

Canada’s New Government fought the last election campaign on a commitment to eliminate the influence of big money in the political process.

And since our very first days in office, we have been delivering on that commitment with an active agenda of meaningful democratic reform.

To start we brought in the Federal Accountability Act which brought in tough new campaign finance rules:

• corporate and union contributions were banned;
• trust funds were banned;
• and a strict limit on annual donations to a political party of $1100 was established, to put an end to the influence of big money.

Later, we introduced legislation to:

• review party registration,
• establish fixed dates for elections,
• improve the integrity of the voting process,
• establish term limits for Senators,
• and create a national process to give Canadians a say in who represents them in the Senate.

With these reforms, we slammed the door on those who sought to exert influence through their cheque books.

But, when Liberal leadership candidates started financing their campaigns by borrowing huge amounts of money from rich individuals, Canadians saw that big money had found a back door.

With this legislation, our government will kick down the doors of political backrooms and regulate all loans made to political parties, candidates and associations in Canada, by establishing a uniform and transparent way of treating loans made to political parties, candidates, and associations, including mandatory disclosure of terms, and the identity of all lenders and loan guarantors.

The bill will put an end to the use of loans to circumvent the contribution limits put in place in The Federal Accountability Act by limiting the total amount an individual can contribute, loan, or guarantee to the contribution limit established in the Federal Accountability Act – which is $1,100 in 2007.

It corrects the situation that makes it possible for unions and corporations to make political loans despite being ineligible to make contributions by banning them from making loans to political parties, candidates, and associations.

Under the Accountability with Respect to Loans legislation only registered financial institutions and political entities will be allowed to loan above the contribution limits, and only at commercial rates of interest, subject to full disclosure requirements.

This will bring our campaign finance rules for loans in line with the rules for political contributions.

It implements a recommendation of the Chief Electoral Officer for Canada.

It is consistent with the political financing rules in place in several provinces.

Most importantly, it is modern accountable, realistic, and will strengthen our democracy – and public confidence – in the integrity of our political system.

With the passage of this Act, Canada’s New Government will create an airtight system of political financing – a system that will eliminate, once and for all, the influence of the rich and powerful on our political process.

The Accountability with respect to Loans Bill will ensure that the 2006 Liberal leadership race was the last time the influence of big money and powerful friends played a role in the selection of a leader of a political party.

Thank you.

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