Government House Leader Peter Van Loan introduces the Accountability with Respect to Loans bill as part of the government’s broader democratic reform agenda. The bill closes a loophole left open by the government’s Accountability Act which imposes new limits on contributions to political parties by allowing only contributions from individuals donating up to $1100 per year to each political party.
Both measures are designed to remove the influence of corporations, trade unions, special interests and wealthy individuals on the political process in favour of broad financial support from individual Canadians.
The new bill closes a loophole where private loans can be made to political parties with no expectation of repayment. The bill:
- Establishes a reporting regime for all loans to political parties, associations, and candidates, including mandatory disclosure of terms such as interest rates, and the identity of all lenders and loan guarantors;
- Bans unions and corporations from making loans to political parties;
- Limits total loans, loan guarantees, and contributions by individuals to $1100 per year as established in the Federal Accountability Act;
- Permits only registered Canadian financial institutions and other political entities to give loans beyond the $1100 limit;
- Makes riding associations responsible for unpaid loans to prevent candidates from avoiding payment.
The Liberal Party’s fundraising ability has been dramatically reduced by the current limits imposed by the Accountability Act, and they oppose this new bill to close the lending loophole. Despite this, the bill is expected to pass the House of Commons with the support of all the other political parties, but it may be blocked by the Liberal dominated Senate.