The man who oversees federal elections in Canada says an attempt by the Conservative government to fix the rules around political loans will create even more confusion in an already complicated system, while leaving loopholes for candidates.
The government has introduced a bill aimed at preventing people who run for office or the leadership of a federal party from racking up massive debt they cannot repay.
That has been a problem for those who ran to lead the Liberals in 2006, three of whom still owe money from that campaign. But it has also been an issue for candidates in past federal elections, who collectively have left millions of dollars on the books.
Marc Mayrand, the Chief Electoral Officer, told a Commons committee on Tuesday that, to his knowledge, sanctions have never been imposed on election candidates or leadership contestants who have failed to repay their loans in the period stipulated by the Canada Elections Act.
So "the current legislation really is toothless," said Conservative MP Tom Lukiwski, who went on to say it is in leadership contests, where spending limits can be close to a million dollars, that loans are the most problematic.
Martha Hall Findlay, who ran in the Liberal leadership race six years ago, paid off her debt from that contest only recently. She has indicated that she would like to make another bid for her party's leadership and said she would not announce her candidacy until all her debts were cleared. But no law compels her to do so.
Mr. Mayrand said the most effective way to reduce the leadership debts of candidates who owe money three years after a race "is not allowing them to run in future elections until they have covered or reimbursed all their debts."
But he reminded the MPs that, like leadership contestants, many election candidates are also unable to clear their debts. And he said the bill the government has put forward to rein in political loans is seriously flawed.
First, Mr. Mayrand said, the legislation would prohibit the combination of any loans, guarantees or contributions made by an individual from exceeding their annual contribution limit of $1,200. But loans are sometimes repaid in the year they were issued, he said.
"This will create considerable uncertainty for political entities" who want to accept money or donors who want to give it, Mr. Mayrand said, "as they will need to determine, at any given moment, whether an individual's limit has been reached."
Second, he said, the bill does not limit the amount of goods or services that a candidate or a supporter could buy and then sell to the campaign on credit.
And third, he said, while the law would require candidates' riding associations or parties to assume unpaid loans that creditors have written off, that does nothing to reduce the insolvency of a leadership candidate. In any event, few creditors write off the unpaid loans.
Mr. Mayrand suggested that the government might follow Ontario's lead by banning individuals from lending to political campaigns. But if loans are allowed, he said, the limit should be separate from the $1,200 contribution ceiling, and it should apply for the whole calendar year regardless of how much is paid back.
Even the Conservatives on the committee acknowledged that the legislation needs work.
"It sounds almost like we've gone from a real mess into a swamp in terms of some of the proposals the bill is trying to accomplish and then your counterproposals," said Conservative MP John Williamson.
"This bill had actually advanced to this stage, [with] multiparty support. I thought we were actually getting somewhere and now I am wondering if that is the case."