Bill C-29: An Act to amend the Canada Elections Act (accountability with respect to loans)

C-29 Second Session, Thirty-ninth Parliament, 56-57 Elizabeth II, 2007-2008 HOUSE OF COMMONS OF CANADA BILL C-29 An Act to amend the Canada Elections Act (accountability with respect to loans) AS PASSED BY THE HOUSE OF COMMONSJUNE 17, 2008 90410 SUMMARY This enactment amends the Canada Elections Act to enact rules concerning loans, guarantees and suretyships with respect to registered parties, registered associations, candidates, leadership contestants and nomination contestants. Also available on the Parliament of Canada Web Site at the following address:http://www.parl.gc.ca .vis1 {position: absolute;display:block;} .vis2 {position: static;} 2nd Session, 39th Parliament, 56-57 Elizabeth II, 2007-2008 house of commons of canada BILL C-29 An Act to amend the Canada Elections Act (accountability with respect to loans) Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows: 2000, c. 9 CANADA ELECTIONS ACT 2003, c. 19, s. 23 1. Subsection 403.28(3) of the Canada Elections Act is replaced by the following: Prohibition — accepting contributions, borrowing (3) No person, other than an electoral district agent of a registered association, shall accept contributions to the registered association or borrow money on its behalf. 2003, c. 19, s. 23 2. Paragraph 403.31(1)(b) of the Act is replaced by the following: (b) the payment was not made in the six-month period referred to in section 403.3. 2.1 Subsection 403.34(1) of the Act is replaced by the following: Deemed contributions 403.34 (1) An unpaid claim mentioned in a return referred to in subsection 403.35(1) is deemed to be a contribution of the unpaid amount to the registered association made as of the day on which the expense was incurred or the loan was made, as the case may be, if the claim remains unpaid in whole or in part (a) 18 months after the end of the fiscal period to which the return relates, in the case of a claim to be paid for an expense; or (b) three years after the day on which the amount is due according to the terms of the loan, in the case of a claim for a loan made to the registered association under section 405.5. 2003, c. 19, s. 23 3. (1) Subparagraph 403.35(2)(e)(ii) of the Act is replaced by the following: (ii) unpaid claims that are, or may be, the subject of an application referred to in subsection 403.31(1) or section 403.32, and loans made to the registered association under section 405.5 that remain unpaid in whole or in part; 2003, c. 19, s. 23 (2) Paragraphs 403.35(2)(i) and (i.1) of the Act are replaced by the following: (i) a statement of each loan made to the registered association under section 405.5, including the amount of the loan, the interest rate, the lender’s name and address, the dates and amounts of repayments of principal and payments of interest and, if there is a guarantor, the guarantor’s name and address and the amount guaranteed; and 2003, c. 19, s. 23 (3) Subsection 403.35(3) of the Act is repealed. 2006, c. 9, s. 46(1) 4. The portion of subsection 405(1) of the Act before paragraph (a) is replaced by the following: Contribution limits 405. (1) Subject to subsection 405.5(4), no individual shall make contributions that exceed 5. The Act is amended by adding the following after section 405.4: Loans, Guarantees and Suretyships Ineligible lenders and guarantors 405.5 (1) Except as permitted under this section, no person or entity shall (a) make a loan to a registered party or a registered association; (b) make a loan to a candidate, a leadership contestant or a nomination contestant in relation to the candidate’s or contestant’s campaign; or (c) guarantee a loan referred to in paragraph (a) or (b). Ineligible borrowers (2) Except if the loan is permitted under this section, no chief agent of a registered party or financial agent of a registered association shall borrow money on behalf of the party or association, and no official agent of a candidate or financial agent of a leadership contestant or nomination contestant shall borrow money for the purposes of the candidate’s or contestant’s campaign. Exception — financial institutions (3) A financial institution as defined in section 2 of the Bank Act may in writing make a loan referred to in subsection (1) at a fair market rate of interest. Exception — individuals (4) An individual who is a citizen or a permanent resident as defined in subsection 2(1) of the Immigration and Refugee Protection Act may, in writing, make a loan referred to in subsection (1) or guarantee such a loan. However, the total of the following amounts shall not at any time exceed the individual’s relevant contribution limit set out in paragraphs 405(1)(a) to (c) and (4)(a) to (c): (a) the amounts of the individual’s contributions; (b) the amounts of the individual’s loans made in the relevant contribution period, not including any amount that has been repaid in the calendar year in which the loan was made; and (c) the amounts guaranteed by the individual in the relevant contribution period, not including any amount for which the individ-ual has ceased to be liable in the calendar year in which the guarantee was given. Exception — certain loans (5) A loan may be made, in writing, (a) by a registered party to a registered association of the party or a candidate endorsed by the party; or (b) by a registered association to the registered party with which it is affiliated, another registered association of the party or a candidate endorsed by the party. Exception — certain guarantees and suretyships (6) A registered party or registered association may, in writing, guarantee a loan made in writing to a party, association or candidate to which it itself is permitted to make a loan under subsection (5). Report — loans 405.6 (1) The chief agent of a registered party, the financial agent of a registered association, the official agent of a candidate or the financial agent of a leadership contestant or nomination contestant shall provide the Chief Electoral Officer with a report in the prescribed form on every loan made under section 405.5 to the party, association, candidate or contestant, as the case may be. The report shall make full disclosure of the loan’s terms and conditions, including (a) the amount of the loan; (b) the interest rate; (c) the lender’s name and address; and (d) if there is a guarantor, the guarantor’s name and address and the amount guaranteed. When report must be sent (2) The report shall be provided at the same time as the financial transactions return provided under paragraph 403.35(1)(a) or 424(1)(a) or the leadership campaign return, electoral campaign return or nomination campaign return provided under paragraph 435.3(1)(a), 451(1)(a) or 478.23(1)(a) respectively, as the case may be. Amendments (3) If there is any amendment to the terms and conditions of the loan — including the giving of a guarantee or suretyship in respect of the loan — after the report on the loan is provided, then the person responsible for providing reports under subsection (1) shall without delay provide the Chief Electoral Officer with a report on the amendment in the prescribed form. Publication (4) The Chief Electoral Officer shall publish a report provided under subsection (1) or (3) as soon as practicable after it is received, in the manner that he or she considers appropriate. Deemed contributions 405.7 (1) A loan made under subsection 405.5(3) or (4) that remains unpaid, in whole or in part, three years after polling day in the case of a candidate, the selection date as defined in section 478.01 in the case of a nomination contestant, the end of the leadership contest in the case of a leadership contestant, and the end of the fiscal period during which the loan was made in the case of a registered party and registered association, is deemed to be a contribution of the unpaid amount to the registered party, registered association, candidate, leadership contestant or nomination contestant made on the day on which the loan was made. When no deemed contribution (2) Subsection (1) does not apply to an unpaid amount that, at the end of the three-year period, (a) is the subject of a binding agreement to pay; (b) is the subject of a legal proceeding to secure its payment; (c) is the subject of a dispute as to the amount that was to be paid or the amount that remains unpaid; or (d) has been written off by the lender as an uncollectable debt in accordance with the lender’s normal accounting practices. Notice by registered party, etc. (3) A registered party, registered association, candidate, leadership contestant or nomination contestant or the registered agent, financial agent or official agent, as the case may be, that believes that any of paragraphs (2)(a) to (d) prevents subsection (1) from applying to a liability of the party, association, candidate or contestant to pay an amount shall so notify the Chief Electoral Officer before the end of the three-year period. Representations (3.1) Before a determination is made under subsection (4), an electoral district association, registered party or lender shall be given the opportunity to make representations to the Chief Electoral Officer. Chief Electoral Officer’s decision (4) The Chief Electoral Officer shall without delay determine whether any of those paragraphs applies to the liability and shall inform the person or entity of his or her decision. Uncollectable debts (5) If the Chief Electoral Officer determines that an unpaid amount of a loan to a candidate of a registered party has been written off under paragraph (2)(d), then the Chief Electoral Officer shall inform the lender of his or her decision; furthermore, the candidate's registered association or, if there is no registered association, the registered party becomes liable for the unpaid amount as if the association or party had guaranteed the loan. Publication (6) As soon as practicable after the end of the three-year period, the Chief Electoral Officer shall publish in any manner that he or she considers appropriate (a) a notice of any unpaid amount that is deemed to be a contribution under subsection (1); and (b) a notice of any unpaid amount that, under subsection (2), is not deemed to be a contribution, as well as the paragraph of that subsection that prevents it from being deemed to be a contribution. 2003, c. 19, s. 31 6. Subsection 416(3) of the Act is replaced by the following: Prohibition — accepting contributions, borrowing (3) No person or entity, other than a registered agent of a registered party, shall accept contributions to the registered party or borrow money on its behalf. 7. Paragraph 419(1)(b) of the Act is replaced by the following: (b) the payment was not made in the six-month period mentioned in section 418. 7.1 Subsection 423.1(1) of the Act is replaced by the following: Deemed contributions 423.1 (1) An unpaid claim mentioned in the financial transactions return referred to in subsection 424(1) or in an election expenses return referred to in subsection 429(1) is deemed to be a contribution to the registered party of the unpaid amount on the day on which the expense was incurred or the loan was made, as the case may be, if the claim remains unpaid in whole or in part (a) 18 months after the end of the fiscal period to which the return relates or in which the polling day fell, as the case may be, in the case of a claim to be paid for an expense; or (b) three years after the end of that fiscal period, in the case of a claim for a loan made to the registered party under section 405.5. 8. (1) Subparagraph 424(2)(f)(ii) of the Act is replaced by the following: (ii) unpaid claims that are, or may be, the subject of an application referred to in subsection 419(1) or section 420, and loans made to the registered party under section 405.5 that remain unpaid in whole or in part; (2) Paragraph 424(2)(j) of the Act is replaced by the following: (j) a statement of each loan made to the registered party under section 405.5, including the amount of the loan, the interest rate, the lender’s name and address, the dates and amounts of repayments of principal and payments of interest and, if there is a guarantor, the guarantor’s name and address and the amount guaranteed; and (3) Subsection 424(3) of the Act is repealed. 2003, c. 19, s. 40 9. Subsection 435.22(1) of the Act is replaced by the following: Prohibition — accepting contributions, borrowing 435.22 (1) No person, other than a leadership campaign agent of a leadership contestant, shall accept contributions to the contestant’s leadership campaign or borrow money on the contestant’s behalf under section 405.5. 2003, c. 19, s. 40 10. (1) Subsection 435.24(1) of the Act is replaced by the following: Payment within three years 435.24 (1) A claim for leadership campaign expenses that has been sent in accordance with section 435.23, as well as a claim for repayment of a loan made under section 405.5, must be paid within three years after the day on which the leadership contest ends. (2) The portion of subsection 435.24(2) of the Act before paragraph (a) is replaced by the following: Exceptions (2) The requirement to pay a claim within three years does not apply to a claim in respect of which 2003, c. 19, s. 40 11. Subsection 435.26(1) of the Act is replaced by the following: Irregular claims or payments — Chief Electoral Officer 435.26 (1) On the written application of a person with a claim to be paid for a leadership campaign expense in relation to a leadership contestant or for a loan made to the leadership contestant under section 405.5, or of the contestant’s financial agent or the contestant in relation to such a claim, the Chief Electoral Officer may, on being satisfied that there are reasonable grounds for so doing, in writing authorize the payment, through the contestant’s financial agent, of the amount claimed if (a) in the case of an expense, the invoice or other document evidencing the claim was not sent in accordance with section 435.23 or the payment was not made in the three-year period referred to in subsection 435.24(1); or (b) in the case of a loan, the repayment of the loan was not made in the three-year period referred to in subsection 435.24(1). 2003, c. 19, s. 40 12. (1) Paragraph 435.27(a) of the Act is replaced by the following: (a) the applicant establishes that an authorization under subsection 435.26(1) has been refused and that the invoice or other document evidencing the claim was not sent in accordance with section 435.23 or the payment has not been made in the three-year period referred to in subsection 435.24(1); or 2003, c. 19, s. 40 (2) Section 435.27 of the Act is renumbered as subsection 435.27(1) and is amended by adding the following: Irregular claims and payments — judge (2) On the application of a person with a claim to be paid for a loan made to a leadership contestant under section 405.5 or on the application of the contestant’s financial agent or the contestant, as the case may be, a judge who is competent to conduct a recount may, on being satisfied that there are reasonable grounds for so doing, by order authorize the payment, through the contestant’s financial agent, of the amount claimed if (a) the applicant establishes that an authorization under subsection 435.26(1) has been refused and that the payment has not been made in the three-year period referred to in subsection 435.24(1); or (b) the amount claimed has not been paid in accordance with an authorization obtained under subsection 435.26(1) and the applicant establishes their inability to comply with the authorization for reasons beyond their control. The applicant shall notify the Chief Electoral Officer that the application has been made. 2003, c. 19, s. 40 13. The portion of subsection 435.28(1) of the Act before paragraph (a) is replaced by the following: Proceedings to recover payment 435.28 (1) A person who has sent a claim in accordance with section 435.23, or has sent a claim for repayment of a loan made to a leadership contestant under section 405.5, may commence proceedings in a court of competent jurisdiction to recover any unpaid amount 13.1 Subsection 435.29(1) of the Act is replaced by the following: Deemed contributions 435.29 (1) An unpaid claim mentioned in a return referred to in subsection 435.3(1) is deemed to be a contribution of the unpaid amount to the leadership contestant made as of the day on which the expense was incurred if the claim remains unpaid, in whole or in part, three years after the end of the leadership contest. 2003, c. 19, s. 40 14. (1) Paragraph 435.3(2)(c) of the Act is replaced by the following: (c) a statement of unpaid claims — including loans made to the leadership contestant under section 405.5 that remain unpaid in whole or in part — that are, or may be, the subject of an application under section 435.26 or 435.27; 2003, c. 19, s. 40 (2) Paragraph 435.3(2)(d.1) of the Act is replaced by the following: (d.1) a statement of each loan made to the leadership contestant under section 405.5, including the amount of the loan, the interest rate, the lender’s name and address, the dates and amounts of repayments of principal and payments of interest, the unpaid principal remaining at the end of each calendar year and, if there is a guarantor, the guarantor’s name and address and the amount guaranteed; 2003, c. 19, s. 40 (3) Subsection 435.3(5) of the Act is repealed. 15. Subsection 438(2) of the Act is replaced by the following: Prohibition — accepting contributions, borrowing (2) No person, other than an official agent of a candidate, shall accept contributions to the candidate’s electoral campaign or borrow money on the candidate’s behalf under section 405.5. 16. (1) Section 445 of the Act is amended by adding the following after subsection (1): Payment — loans (1.1) A loan made to a candidate under section 405.5 must be repaid within three years after polling day. (2) The portion of subsection 445(2) of the Act before paragraph (a) is replaced by the following: Exceptions (2) The requirement to pay within the period set out in subsection (1) or (1.1) does not apply to a claim or loan in respect of which 17. Subsection 447(1) of the Act is replaced by the following: Irregular claims or payments — Chief Electoral Officer 447. (1) On the written application of a person with a claim to be paid for a candidate’s electoral campaign expense or for a loan made to the candidate under section 405.5, or of the candidate’s official agent or the candidate in relation to such a claim, the Chief Electoral Officer may, on being satisfied that there are reasonable grounds for so doing, in writing authorize the payment, through the candidate’s official agent, of the amount claimed if (a) in the case of an expense, the invoice or other document evidencing the claim was not sent in accordance with section 444 or the payment was not made in the four-month period mentioned in subsection 445(1); and (b) in the case of a loan, the repayment of the loan was not made in the three-year period mentioned in subsection 445(1.1). 18. Section 448 of the Act is renumbered as subsection 448(1) and is amended by adding the following: Irregular claims and payments — judge (2) On the application of a person with a claim to be paid for a loan made to a candidate under section 405.5 or on the application of the candidate’s official agent or the candidate, as the case may be, a judge who is competent to conduct a recount may, on being satisfied that there are reasonable grounds for so doing, by order authorize the payment, through the candidate’s official agent, of the amount claimed if (a) the applicant establishes that an authorization under subsection 447(1) has been refused and that the payment has not been made in the three-year period mentioned in subsection 445(1.1); or (b) the amount claimed has not been paid in accordance with an authorization obtained under subsection 447(1) and the applicant establishes their inability to comply with the authorization for reasons beyond their control. The applicant shall notify the Chief Electoral Officer that the application has been made. 19. Subsection 449(1) of the Act is replaced by the following: Proceedings to recover payment 449. (1) A person who has sent a claim in accordance with section 444, or has sent a claim for repayment of a loan made to a candidate under section 405.5, may commence proceedings in a court of competent jurisdiction to recover any unpaid amount (a) at any time, if the candidate or his or her official agent refuses to pay that amount or disputes that it is payable; or (b) after the end of the period mentioned in subsection 445(1) or (1.1) or any extension of that period authorized by subsection 447(1) or section 448, in any other case. 19.1 Subsection 450(1) of the Act is replaced by the following: Deemed contributions 450. (1) An unpaid claim mentioned in a return referred to in subsection 451(1) is deemed to be a contribution of the unpaid amount to the candidate made as of the day on which the expense was incurred or the loan was made, as the case may be, if the claim remains unpaid in whole or in part (a) 18 months after polling day for the election to which the return relates, in the case of a claim to be paid for a candidate's electoral campaign expense; or (b) three years after that polling day, in the case of a claim for a loan made to the candidate under section 405.5. 20. (1) Paragraph 451(2)(e) of the Act is replaced by the following: (e) a statement of unpaid claims — including loans made to the candidate under section 405.5 that remain unpaid in whole or in part — that are, or may be, the subject of an application under section 447 or 448; (e.1) a statement of each loan made to the candidate under section 405.5, including the amount of the loan, the interest rate, the lender’s name and address, the dates and amounts of repayments of principal and payments of interest, the unpaid principal remaining at the end of each calendar year and, if there is a guarantor, the guarantor’s name and address and the amount guaranteed; (2) Subsection 451(3) of the Act is repealed. 2003, c. 19, s. 57 21. Subsection 478.13(1) of the Act is replaced by the following: Prohibition — accepting contributions, borrowing 478.13 (1) No person, other than the financial agent of a nomination contestant, shall accept contributions to the contestant’s nomination campaign or borrow money on the contestant’s behalf under section 405.5. 2003, c. 19, s. 57 22. Subsection 478.17(1) of the Act is replaced by the following: Payment within four months 478.17 (1) A claim for nomination campaign expenses that has been sent in accordance with section 478.16, as well as a claim for repayment of a loan made to the nomination contestant under section 405.5, must be paid within four months after the selection date or, in the case referred to in subsection 478.23(7), the polling day. 2003, c. 19, s. 57 23. Subsection 478.19(1) of the Act is replaced by the following: Irregular claims or payments — Chief Electoral Officer 478.19 (1) On the written application of a person with a claim to be paid for a nomination campaign expense in relation to a nomination contestant or for a loan made to the contestant under section 405.5, or of the contestant’s financial agent or the contestant in relation to such a claim, the Chief Electoral Officer may, on being satisfied that there are reasonable grounds for so doing, in writing authorize the payment, through the contestant’s financial agent, of the amount claimed if (a) in the case of an expense, the invoice or other document evidencing the claim was not sent in accordance with section 478.16 or the payment was not made in the four-month period referred to in subsection 478.17(1); and (b) in the case of a loan, the repayment of the loan was not made in the four-month period referred to in subsection 478.17(1). 2003, c. 19, s. 57 24. Section 478.2 of the Act is renumbered as subsection 478.2(1) and is amended by adding the following: Irregular claims and payments — judge (2) On the application of a person with a claim to be paid for a loan made to a nomination contestant under section 405.5 or on the application of the contestant’s financial agent or the contestant, as the case may be, a judge who is competent to conduct a recount may, on being satisfied that there are reasonable grounds for so doing, by order authorize the payment, through the contestant’s financial agent, of the amount claimed if (a) the applicant establishes that an authorization under subsection 478.19(1) has been refused and that the payment has not been made in the four-month period referred to in subsection 478.17(1); or (b) the amount claimed has not been paid in accordance with an authorization obtained under subsection 478.19(1) and the applicant establishes their inability to comply with the authorization for reasons beyond their control. The applicant shall notify the Chief Electoral Officer that the application has been made. 2003, c. 19, s. 57 25. The portion of subsection 478.21(1) of the Act before paragraph (a) is replaced by the following: Proceedings to recover payment 478.21 (1) A person who has sent a claim in accordance with section 478.16, or has sent a claim for repayment of a loan made to a nomination contestant under section 405.5, may commence proceedings in a court of competent jurisdiction to recover any unpaid amount 25.1 Subsection 478.22(1) of the Act is replaced by the following: Deemed contributions 478.22 (1) An unpaid claim mentioned in a return referred to in subsection 478.23(1) is deemed to be a contribution of the unpaid amount to the nomination contestant made as of the day on which the expense was incurred or the loan was made, as the case may be, if the claim remains unpaid in whole or in part (a) 18 months after the selection date — or in the case referred to in subsection 478.23(7), after the polling day — in the case of a claim to be paid for a nomination contestant's nomination campaign expense; or (b) three years and one day after the selection date — or in the case referred to in subsection 478.23(7), after the polling day — in the case of a claim for a loan made to the nomination contestant under section 405.5. 2003, c. 19, s. 57 26. (1) Paragraph 478.23(2)(c) of the Act is replaced by the following: (c) a statement of unpaid claims — including loans made to the nomination contestant under section 405.5 that remain unpaid in whole or in part — that are, or may be, the subject of an application under section 478.19 or 478.2; (c.1) a statement of each loan made to the nomination contestant under section 405.5, including the amount of the loan, the interest rate, the lender’s name and address, the dates and amounts of repayments of principal and payments of interest, the unpaid principal remaining at the end of each calendar year and, if there is a guarantor, the guarantor’s name and address and the amount guaranteed; 2003, c. 19, s. 57 (2) Subsection 478.23(5) of the Act is repealed. 27. (1) Subsection 497(1) of the Act is amended by adding the following after paragraph (i.7): (i.8) being a person or entity, contravenes subsection 405.5(1) or (2) (making a loan, guaranteeing a loan or borrowing money); (i.9) being the chief agent of a registered party, the financial agent of a registered association, the official agent of a candidate or the financial agent of a leadership contestant or nomination contestant, contravenes subsection 405.6(1) or (3) (failure to report to the Chief Electoral Officer); 2003, c. 19, s. 58(6) (2) Paragraphs 497(1)(t) and (u) of the Act are replaced by the following: (t) being an official agent, contravenes subsection 445(1) or (1.1) (failure to pay recoverable claim or loan in timely manner); (u) being an official agent, contravenes subsection 451(1), (2) or (4) (failure to provide electoral campaign return or related documents); (3) Subsection 497(3) of the Act is amended by adding the following after paragraph (f.19): (f.2) being a person or entity, wilfully contravenes subsection 405.5(1) or (2) (making a loan, guaranteeing a loan or borrowing money); (f.21) being the chief agent of a registered party, the financial agent of a registered association, the official agent of a candidate or the financial agent of a leadership contestant or nomination contestant, wilfully contravenes subsection 405.6(1) or (3) (failure to report to the Chief Electoral Officer); 2003, c. 19, s. 58(15) (4) Paragraph 497(3)(r) of the Act is replaced by the following: (r) being an official agent, wilfully contravenes subsection 451(1), (2) or (4) (failure to provide electoral campaign return or related documents); TRANSITIONAL PROVISION Prior loans 28. Loans made before the coming into force of this Act continue to be subject to the provisions of the Canada Elections Act, as they read immediately before the coming into force of this Act. COMING INTO FORCE Coming into force 29. This Act comes into force six months after the day on which it is assented to unless, before then, the Chief Electoral Officer publishes a notice in the Canada Gazette that the necessary preparations for the bringing into operation of this Act have been made and that this Act may come into force accordingly, in which case it comes into force on the day on which the notice is published. Published under authority of the Speaker of the House of CommonsAvailable from:Publishing and Depository ServicesPublic Works and Government Services Canada