OTTAWA, ONTARIO--(Marketwire - Oct. 2, 2012) - The Honourable Tim Uppal, Minister of State (Democratic Reform), today welcomed the vote and second-reading passage of the Political Loans Accountability Act. The bill seeks to bring greater transparency and accountability to Canada's political financing regime by banning corporate and union political loans and by requiring loans to politicians from financial institutions to be made at market rates of interest.
"The Harper Government took action to eliminate corporate and union donations in 2006," said Minister Uppal. "Today, we are continuing to strengthen the integrity of Canada's political financing system by moving forward with legislation to ban corporate and union political loans."
The proposed changes to the rules for political loans are fourfold:
- Unions and corporations would be banned from making loans to political parties, associations, candidates and contestants, consistent with their inability to make contributions as set out in the Federal Accountability Act.
- The bill would establish a uniform and transparent reporting regime for all loans to political parties, associations, candidates and contestants, including mandatory disclosure of the terms of the loan (such as interest rates) and the identity of all lenders and loan guarantors.
- Total loans, loan guarantees, and contributions by individuals would not exceed the annual contribution limit for individuals established in the Federal Accountability Act ($1,200 in 2012).
- Only financial institutions (at market rates of interest) and political entities would be able to grant loans beyond the annual contribution limit for individuals. Rules for the treatment of unpaid loans would be tightened to ensure candidates cannot walk away from unpaid loans: riding associations or parties would be held responsible for unpaid loans taken out by their candidates.
The bill also amends the contribution limits for leadership contestants from a per-contest basis to a per-calendar year basis.
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.
"We are bringing greater integrity, accountability, and transparency to political financing with the Political Loans Accountability Act," said Minister Uppal. "Hardworking Canadians are expected to take out and pay back loans under strict terms and conditions, and the same should apply to politicians."