A democracy watchdog is nipping at the heels of Elections Canada over Liberal leadership race campaign loans it says doesn’t pass the smell test.
But Elections Canada, which signed off on the loans, says they’re above board.
Democracy Watch co-ordinator Tyler Sommer argues a close reading of the Election Act suggests the loans should actually be considered contributions, making them subject to the $1,200 legal limit.
He called on Elections Canada on Monday to “end this charade” and clarify the rules, and for the federal government to pass Bill C-21, which would tighten rules around political loans.
Sommer maintains the fuzzy rules allow long-shot hopefuls to buy their way into a race.
“At the end of the day, they should have support from enough people to raise a decent amount of money to pay their way in and show they’re actually a viable option,” he said.
Leadership hopeful David Bertschi is on the hook for $75,000, Karen McCrimmon $32,000, Deborah Coyne $25,000 and Martha Hall Findlay $25,000.
Coyne’s campaign manager Jeff Jedras said Democracy Watch is “misunderstanding” the campaign process, and that his team follows Elections Canada and Liberal Party rules.
Campaigns could start fundraising at any time but could only issue tax receipts once the race officially kicked off in November, so Coyne helped bankroll her campaign upfront and is fundraising to pay it back during the race, Jedras said.
“It’s a bit easier to fundraise when you can offer a tax receipt,” he said.
Bertschi’s campaign team said their candidate did the same.
“He’d rather take on the loan personally and then ask for (contributions) later,” campaign manager Leo Bourdon said.
The act states that any personal money used by a leadership candidate for the campaign “is considered to be a contribution.”
Without being able to point to specifics in the legislation, a spokesman for Election Canada said the agency considered the funds to be campaign loans and not contributions.
Candidates lending cash to their own campaigns is not new.
Two failed contestants in recent NDP and Bloc Quebecois leadership races used their own funds to bankroll their bids.
In 2006, a slew of Liberal leadership hopefuls were left struggling to pay off debts after loaning their campaigns huge amounts to enter the race.
Three still haven’t paid that debt, including Ken Dryden, who still owes about $360,000.
This time around, the party capped the debt limit at $75,000.
UPDATE: The Martha Hall Findlay camp says their candidate has already paid back the amount she loaned the campaign upfront. And Karen McCrimmon’s team released the following statement:
Karen’s campaign is well within Elections Canada and the Liberal Party of Canada rules. In fact, each campaign has 18 months to pay off this loan after the campaign comes to a close via fundraising. This loan is necessary, and is used as a seed fund which is required for growth. Canadians who choose to participate in the democratic selection of a new leader by donation to our Liberal Party Candidates, do so with their own hard earned money. What is needed to pay down this specific loan is 1600 people to donate just $20.00. Each person who donates this said $20, is eligible to receive $15.00 of this back at tax time.