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Former Liberal MP Martha Hall Findlay on March 18, 2008.MIKE CASSESE/Reuters

The federal Liberals are setting strict new rules for their spring leadership convention, prohibiting candidates from exceeding $75,000 in debt, according to a well-placed source.

Humiliated by the fact that some failed leadership candidates were still saddled with debt from the 2006 contest that elected Stéphane Dion, the Liberal executive is also expected to call for a $75,000 non-refundable deposit to enter the race and limit spending to $750,000.

It is not clear how the party will police the issue of exceeding the debt limit.

The details of what is expected to be an early April convention in Toronto are to be revealed later at the federal Liberal caucus in Montebello, Que.

The source saw a draft of the proposals.

In 2006, the party put a $50,000 deposit to enter the race but that was later refunded to candidates to help them pay off their debts. In addition, the spending limit was $3.4-million for each campaign.

In fact, in 2008 – two years after the leadership – Mr. Dion still owed about $300,000. Even last year, he and others were still trying to pay off the last bit of his debt, according to reports.

The new party rules, according to the source, would demonstrate that Liberals are serious about this campaign and that there is some responsibility for those who decide to enter. As well, this would avoid the embarrassment of politicians not able to pay off debts years and years after the race.

The Liberals were reduced to third party status in the 2011 federal election.

Early last month, there was a report that Martha Hall Findlay, a former Liberal MP, was trying to pay off her debts from her 2006 bid in order to run in the upcoming leadership. She still owed $45,000.

So far no big names have stepped forward although there is a lot of speculation around Quebec MP Justin Trudeau throwing his hat into the ring.