Hon. David P. Smith:

Honourable senators, I rise today to speak to this important piece of legislation. With this legislation, the government claims that the intended goals are to increase transparency and accountability in political financing in Canada. That, in theory, is a reasonable goal. However, I think it is fair to point out some background on this bill.

In the last ten years, the Liberals did trail-blazing work in respect to increasing accountability in the Canadian political system. We certainly showed our commitment to transparency with our past initiatives, and we intend to continue our commitment to transparency. Quite frankly, it was difficult for candidates and campaign managers. I had to listen to primal screams from many of them, but I think we moved in the right direction.

The government may argue that Bill S-6 is intended to stop the undue influence of wealthy contributors who were supposedly skirting the Canada Elections Act donation limits through the use of personal loans. I think there is a touch of fear mongering in that position, because the truth is that under the current law, the details of all those loans, including amounts and names of lenders and guarantors, must be publicly disclosed. This information is easily accessible via Elections Canada.

I also think it would lend more credibility, because this also includes such things as leadership costs, to the Conservative arguments if their leader finally disclosed what he spent on his leadership campaign and where the money came from. We still have not heard that, and we all know the saying, "You can't talk the talk unless you walk the walk."

It will also be interesting to see the decision of the court on the in-and-out issue. Admittedly, this was not something that we pursued. Elections Canada pursued that matter. They did not view those actions as being in the transparency category. I am a firm believer in due process. The Conservative Party challenged it, and they have every right to do that. I have been following it in the papers. There was a story in the Citizen today. It will be interesting to see what the court concludes. I am not trying to be partisan here. I am just saying it will be interesting to see what they conclude.

Let me first raise the subject of financial institutions, because for many individuals who wish to enter politics, one key issue has, and will always be, access to funds. Financing a campaign right from the nomination race through to election day can be a difficult and stressful undertaking. The government argues that this bill will level the playing field by limiting who can make loans, essentially making financial institutions the only substantive loan provider. However, the reality may be that it actually decreases options for individuals wishing to seek public office.

This measure will force financial institutions to almost become partners on the street with political campaigns. This is something I do not think the banks have ever really wanted to do, and it is not easy for them to do. How do you force a bank manager in a particular riding to say, "Okay, we will finance the Liberals but not the Conservatives or the NDP?" Then they have to get into the track record of the credit of the various candidates. That is a swamp.

What does this bill do for people with bad credit or people who are not wealthy or well-to-do? Essentially, this bill provides the banks with influence over who can run — not control, but influence.

Financial institutions will have significant decision making power on the amount of financial support any given candidate can receive for his or her campaign. Is that really a responsibility we want to place entirely in the hands of financial institutions?

I suppose, if you love this bill, you might argue that the banks will be okay because after a certain period of time under the bill, if a loan is not paid, then it becomes the responsibility of the local riding association. However, there are many questions here. I am not trying to be a killjoy, but what about smaller political parties? They are an important part of our democratic process. Will all Canadians have equal access to loans by financial institutions? Obviously, not all candidates for elected office will have equal opportunities to win elections or even have a vote high enough to get funding under the act. Will financial institutions take into account a candidate's relative chance of winning an election and their chance of attaining enough votes to receive a rebate from Elections Canada under the Canada Elections Act before deciding whether to extend credit to smaller parties or independent candidates? These are problems.

Are there constitutional implications of this bill perhaps under the Charter? Does it unduly target less-resourced candidates and parties from participating in the political process?

Impact on women is a valid concern. Canada has 68 women in Parliament, which is just over 22 per cent of MPs. We ranked forty-sixth in the world on the Inter-Parliamentary Union's list of women in national parliaments. Canada has fewer women in Parliament than most of Europe and many other countries in the world, just over 22 per cent. Why?

There are a number of reasons, but I can tell you that one reason is financing. The 1992 Royal Commission on Electoral Reform and Party Financing, or the Lortie commission, as it was known, identified the financing of political campaigns as a significant obstacle for women entering politics. This continues to be a problem. Whether we like it or not, on average, women earn less money than their male counterparts. That difference is shrinking but they still do, and in many cases, they do not have adequate credit history and/or assets to satisfy bank requirements for loans and under this legislation, only financial institutions can do the loaning.

Getting more women into politics has always been a personal concern of mine. Going back to Mr. Chrétien's first campaign, which was in 1993, there were not as many women involved as I thought we should have, and at our 1991 convention — and I was chairing the campaign then too — we made amendments to the constitution that gave the campaign committee control over who was running in certain circumstances. It gave the leader the prerogative to appoint a certain number of candidates.

I remember in Toronto, in the 1993 campaign, there were 23 seats in Toronto proper. We had nominated 21, and 21 out of 21 were men. I had not let the last two ridings go ahead because a couple of hard-line pro-life groupers, sort of a one-string violin, had taken over the riding associations and were going to nominate two more men.

I said to Mr. Chrétien this is a case where you have to do the right thing, appoint a couple of women and send out a message that we are serious and committed to getting more women in Parliament.

An Hon. Senator: How many seats did we win in Ontario?

Senator Smith: We won 98 out of 99 seats with Jean Augustine and Maria Minna. Sometimes you have to bite the bullet if you want to do the right thing.

We have had quite a good record ever since. In the 2006 election, 27.6 per cent of our candidates were women. The Conservatives had 12.3 per cent, so we were more than double. I am not trying to be partisan. In the 2008 election, we got the figure up to 113 women candidates, which was a record. I was proud of that number. It was 36.7 percent, and I was chairing that one too. The Conservatives went up too, to 63 women candidates. They had 20.9 per cent. The NDP were at 33 per cent. We were well ahead of them. The Bloc had 20 women out of 75 candidates.

I do not have the figures. I am not trying to be partisan. It is important for all parties to get more women into Parliament. We were doing our best, and for us to have had 36.7 per cent women was an achievement.

The point I am trying to make is that I think some of the restrictions in the bill will affect women more negatively than it will men. This is a reality, regardless of what party they represent. The full implications of this bill on political parties and local electoral districts are not clear.

The bill places a high level of liability to repay loans on riding associations. What happens when the candidate defaults on the loan? It is common for that loan to revert to the association. Is the riding executive responsible? It is not clear. Is the association considered a corporate entity? What are the ramifications for these volunteers?

I am concerned that one of the unintended consequences of this bill will be to impose financial fear upon volunteers from all political parties, and it will be one more factor that weighs in to discourage people from entering the public arena.

Another question, it is not clear about spouses or joint bank accounts and they can only contribute to the $1,100. I think it is a problem.

Another issue is the partners in the process, campaign suppliers and service providers. The bill stipulates that in the event a candidate or a riding association is unable to repay a campaign expense within 18 months, then the expense is deemed to become a contribution. Given that the law currently prohibits corporate contributions, does this inadvertently — I do not think this would have been intentional — end up creating a situation where a company or a supplier breaks the law, through no fault of his or her own, because the bill was not paid and is then regarded as a contribution after 18 months. This bill could put undue pressures on suppliers and service providers.

We all support transparency and accountability. I am not trying to be partisan. I think we want our system to work for all parties and be a level playing field and although, that may be the case with this bill, I believe there are many questions that honourable senators will want to consider thoroughly.

We all want an electoral system that is more accountable and more transparent, but what is important is that this system of electoral accountability not limit access to different candidates, perhaps because of gender and their unlevel financial playing field, or smaller parties that may not be able to persuade the banks to finance their campaigns.

It is not clear to me that the type of accountability proposed in the bill is equitable, fair and democratic accessibility. When this bill goes to the committee, I think these are some of the questions that will have to be looked at. There is a lot of work to do on this bill, and those are my thoughts as of today.

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