Address by Prime Minister Jean Chrétien on the occasion of the second reading of Bill C-24, an Act to amend the Canada Elections Act and the Income Tax Act (Political Financing)

February 11, 2003
Ottawa, Ontario

I rise in this House today to move Second Reading of a Bill that will change the way politics is done in this country.

A Bill that will address the perception that money talks. That big companies and big unions have too much influence on politics.

A Bill that will reduce cynicism about politics and politicians.

A Bill that is tough but fair.

Canadians demand transparency, openness and accountability. They demand it in health care. and we delivered last week.

Canadians demand it from their politicians in terms of their fundraising and we are delivering with this Bill.

This Bill provides for full disclosure of all contributions and expenses over $200 at all levels. Not only for national parties and candidates in elections. But for riding associations. For nominations. For leadership candidates.

We are acting on recommendations of the Chief Electoral Officer, Mr. Jean-Pierre Kingsley – an officer of the Parliament of Canada. These recommendations were the culmination of a career spent as custodian of the democratic process in Canada. A career that has earned him the respect and gratitude not just of Canadians or of this House… but of new and struggling democracies around the world that have sought his advice as they have worked to bring truly democratic and fair elections to their nations. I want to pay tribute to M. Kingsley – and thank him for his excellent work.

With these new rules.  There will be no more black holes for campaign contributions. No more allowing un-receipted money and unaccounted expenses.

We only have to look south of the border to see how money impacts on politics. The many millions that are raised for individual senate seats. The huge contributions to political action committees.

In the United States the fitness of a candidate for office is judged first on his or her ability to raise huge sums of money. Rather than on his or her brains or ability to lead. They call it the "money primary", Mr. Speaker. And it takes place in the shadows. Long before an idea is expressed. Before a speech is given. Before a vote is cast.

We do not want to see this in Canada. This Bill will ensure that we have a very different system. A typical Canadian institution. A system that will be a model for democracies.

Many years ago we in Canada placed limits on campaign spending. This Bill places limits on fundraising. Limits on contributions to political parties. Limits for candidates. Limits for nominations. Limits for leaderships. And it imposes full disclosure.

I was not always in agreement with René Lévesque on everything.

But there is no doubt that the party financing legislation he passed in Quebec has served as a model for democracy. It has worked well. This Bill builds on that model and corrects some of its flaws.

Contributions from individuals will be limited to a maximum of $10,000 to a political party per year. This amount is approximately equivalent in current dollars to the $3000 of the Quebec legislation of 1977.

This legislation builds on Manitoba’s law of a few years ago banning corporate and union contributions to political parties.

With a very limited exception, which I will explain in a moment, businesses and trade unions will be prohibited from contributing to political parties or candidates or party leaderships or riding nominations.

We all know that there is a perception that corporate and union contributions buy influence. I do not believe that this is true. And I don’t believe that any member of this House feels that he or she has been improperly influenced.

But, and this is very important, there is something we should all recognize. All of us in this House have been guilty at one time or another of throwing out the accusation that corporate or union contributions influence our opponents – often without foundation. And the media even more so.

This is not good for the political process. It is not good for democracy.

This Bill addresses this issue head on. I firmly believe that the elimination of contributions to political parties by business and trade unions will greatly improve the political culture in Canada.

Mr. Speaker, members of Parliament argued that they should not be precluded from taking very small contributions from local businesses in their ridings.

In fact in the last election, the average such contribution was $450. Clearly such contributions cannot be seen to be unduly influencing decisions.

Therefore the Bill allows businesses and trade unions to contribute a maximum of $1000 a year to a candidate or a riding association. But not to a national party.

This is an acceptable compromise I believe. But anything more would gravely diminish the purpose of this Bill. A thousand dollars a year during a four year period adds up to $4000.

No business should be able to contribute more than that to a political party through a riding association.

We cannot allow to be re-created at the riding level what we are trying to stop at the national level.

Indeed, one of the great frustrations of those who seek real political finance reform is the persistence of significant loopholes that allow parties to get around the law.

Preventing such loopholes before and the public cynicism they produce is why this Bill is so tough!

Political parties are essential to the democratic process. We all know that in this House. We all know that they need money to operate. That too is essential in a democracy.

The principle of public financing is long established in Canada. Through tax credits for individual contributions to political parties. And through rebates to parties and candidates for a proportion of election expenses.

To make up for the loss of corporate and union contributions, this Bill substantially increases public financing of the political process.

The limit for the maximum tax credit for individual contributions is raised from $200 to $400.

National party rebates for election expenses will be raised from 22½ % to 50%.

Candidates themselves receive a rebate of 50% if they have more than 15% of the vote. The Bill reduces the threshold to 10%.

Each political party will receive $1.50 each year per vote it had in the last general election.

The increase in the individual tax credit, the increase in the rebate, and the direct subsidy to the Party will make up for the loss of corporate and trade union contributions. And it will do so through public financing the only way to remove the perception that big money influences decisions of government.

And we can do this at the cost of about 65 cents per Canadian in non-election years. And a bit more than a dollar a Canadian in an election year.

This is a very small price to pay for helping to improve our democracy. And it is a very good investment of public funds.

I know some have suggested that the subsidy to political parties means that an individual’s tax dollars may go to a party that he or she disagrees with. The reality is that the $1.50 a year goes to the party that person voted for in the previous election.

And if someone changes his or her mind after an election, if people realize they made a mistake by voting, for example, for the Canadian Alliance, the $1.50 per year still adds up to a total of $6.00 over four years.

That person can make up for his mistake by making a personal contribution of up to $10, 000 a year to the political party of his or her choice. And that person will benefit from the increase in the limit for the maximum tax credit. So the argument about the use of tax dollars for a political party the taxpayer does not agree with just does not hold water.

As a result of this Bill, elections will be financed almost 90% by the public. This will make Canada a model for democracy. It is something we should all be proud of.

I know some Members have concerns about the impact of this Bill on the internal workings of political parties. It is important to understand that these are matters that are not for legislation. They are matters for parties to work out. We do not need legislation to regulate the internal workings of political parties.

Mr. Speaker, this is a long Bill. With a lot of clauses in it. It is possible that there are provisions that have been drafted in a way where there are unintended consequences. I would hope that the Committee would propose appropriate amendments.

But the basic principles of this Bill are fundamental to the government. By that I mean, the disclosure and accountability, the banning of corporate and union contributions with the maximum $1000 exception, the limits on individual contributions and the public financing regime.

Corporations and unions have contributed to political parties out of a spirit of good corporate citizenship. I thank them and all political parties thank them. I would hope that in the future, they will take the money that they would have otherwise contributed to political parties, and instead contribute to charities and universities.

Mr. Speaker, democracy is a living thing. The history of the world teaches us it is a fragile thing, as well. To be nurtured. To be encouraged. To be promoted. And to be defended.

I know philosophers say that there is no such thing as a "perfect democracy". Of course that is true. Any society is a work in progress. But the truest test of a living, growing democracy like Canada is the extent to which our institutions strive to live up to our ideals. For it is in continuing to measure ourselves against our ideals that we reaffirm their power to inspire.

I believe that this Bill passes that test, Mr. Speaker.

That is why this Bill is about making Canada more open. It is about removing barriers for women, for members of religious or ethnic minorities. For the poor and the disadvantaged. And ultimately why it is about ensuring that their voice is heard as loudly and clearly as anyone else’s.

Mr. Speaker, I am approaching the fortieth anniversary of my first election to this House in 1963. I have had the honour to be elected to this body twelve times.

And I know I speak for every man and woman in this House when I say that on each one of those occasions, I have been filled with reverence for the democratic system.

This Bill, far from repudiating the system that allowed me and so many others to serve this great country, pays tribute to it. By seeking to give it a new energy, a new vigour, a new relevance.

By passing on to the next generation a democratic tradition not tired or worn, but renewed and alive. Not perfect but better. One that lives up to its name the most beautiful, most fragile, most cherished word in any language… DEMOCRACY.

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