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Candidates Gerard Kennedy, middle, and Martha Hall Findlay celebrate Stephane Dion's election as Liberal leader in Montreal on Dec. 2, 2006. (Jim Ross/Jim Ross for The Globe and Mail)
Candidates Gerard Kennedy, middle, and Martha Hall Findlay celebrate Stephane Dion's election as Liberal leader in Montreal on Dec. 2, 2006. (Jim Ross/Jim Ross for The Globe and Mail)

Tory campaign-finance reform compounds Liberal leadership debt Add to ...

Martha Hall Findlay is strongly considering another run at the leadership of the federal Liberal Party. But the former MP still owes tens of thousands of dollars from her leadership campaign of six years ago and the country’s election law is making it difficult for her to get out from under the debt.

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Ms. Hall Findlay is just one of four contestants in that 2006 race who have yet to repay the loans they incurred to cover their campaign expenses. Ken Dryden, Joe Volpe, and Hedy Fry are in the same situation.

“It is incredibly difficult to pay this stuff off,” Ms. Hall Findlay said in a recent interview. “Do you know how many times I have had to turn back cheques, how frustrating that is?”

The former candidates may have the cash to pay what they owe – in Ms. Hall Findlay’s case, she lent the money to herself.

But they have already contributed the maximum allowed to their own campaign. And Canada’s election law dictates that no one may donate more than $1,100, in total, to help candidates in a single leadership race. So, if a Liberal supporter gave $1,100 to one of Ms. Hall Findlay’s competitors, they are not permitted to give money to her.

It is a rule that was imposed retroactively by the Conservative government of Prime Minister Stephen Harper. When the 2006 Liberal leadership campaign began, every donor was allowed to contribute $5,400 and the candidates budgeted and borrowed accordingly.

Now, with the party’s popularity in the basement and the pool of card-carrying Liberal donors practically exhausted, those who still owe money are being forced to turn to non-Liberal donors to help them pay for a contest they lost six years ago.

Meanwhile, an Ontario Superior Court judge ruled last year that candidates had until the end of 2011 to clear their debt. The four who missed the deadline have had to go back to the court for an extension. And they will have to keep going back until they have raised the money they owe.

But, if a judge eventually rules that they have no reasonable hope of raising the cash, the matter will be handed back to the Commissioner of Canada Elections, who could ask the Director of Public Prosecutions to prosecute. The range of penalties includes jail time.

The Conservative government has introduced legislation that would restore the ability of donors to contribute the maximum amount to contestants in the same leadership race year after year. But there is no indication that it will be applied retroactively.

“The proposed amendment in the Political Loans Accountability from per-contest to per-annum was simply a technical decision to bring consistency among contribution limits across Canada’s political-financing regime,” explained Kate Davis, a spokesman for Tim Uppal, the Minister of State for Democratic Reform.

It is unknown whether any of the candidates in the recent NDP leadership race will find themselves caught in the same predicament. They don’t have to file final expense reports until September. But the cap in that race was $500,000, significantly less than the $3.4-million that the Liberals allowed themselves.

The Liberal Party brass will meet in June to set the rules for the next leadership campaign that will start sometime in the fall and wrap up next spring.

Potential candidates, including Ms. Hall Findlay, are assessing their chances and sorting out their own financing. She was able to convince former prime minister Paul Martin to appear as the guest of honour at a fundraiser in Willowdale, north of Toronto, this week. She is still $60,000 in the hole but is optimistic that she can raise the rest of the money by June.

According to their last reports to Elections Canada, Ken Dryden owed about $350,000; Joe Volpe, more than $100,000; and Hedy Fry, about $50,000. But Elections Canada is unable to say how much they have paid off since those filings were made.

“To me,” Ms. Hall Findlay said, “it’s very important to make sure that we get the one [campaign]out of the way before diving right back into another one.”

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