The Conservatives’ plan to limit and cap political loans received praise from the NDP Wednesday. Although the bill benefits the Tories for now, it spares New Democrat leadership candidates from stiffer rules while making it more difficult for Liberal leadership contestants to raise money.

Democratic Reform Minister Tim Uppal told reporters the Political Loans Accountability Act would “level the playing field” by banning loans from corporations and unions and limiting the amounts individuals can lend themselves or borrow from others.

Rich candidates or those with access to easy money would no longer have the ability to fund their own campaigns, Uppal suggested.
“We don’t want wealthy individuals to have undue influence on the political process,” he said.

The government’s bill would only allow political parties, riding associations, candidates and leadership contestants to obtain loans from financial institutions or political party and riding association themselves. Mandatory disclosure terms, on information such as the interest rates of the loans and the identity of lenders and loan guarantors would also be imposed. And candidates would also no longer be able to walk away from any unpaid loans, writing them off as donations, as political parties and associations would be held responsible for the unpaid cash.

“Every day Canadians are expected to pay back loans under strict guidelines. The same should be expected of their politicians,” Uppal said.

NDP MP Pat Martin told The Huffington Post he’s pleased with the legislation even though parties with deeper pockets will be able to bankroll candidates in ways that small parties can’t — a move the Tories themselves admit benefits them most for now.

Elections Canada data released Wednesday shows the Conservative Party continues to have the deepest pockets. The Tories raised $18,643,508.09 from 132,438 contributors during the first three quarters of 2011. That's more than double its closest fundraising competitor, the Liberals, who raised, $7,595,957.36 from 68,372 contributors in that same time period. The NDP raised $5,892,672.81 from 54,349 contributors, the Green Party $1,328,682.85 from 13,422 contributors and the Bloc Quebecois $649,747.73 from 6,615 contributors. (Individuals may have donated more than once).

“It’s unavoidable,” Martin said, of the Conservatives' advantage. “It’s a necessary fallback position. There had to be some qualifiers in there if you are going to put these harsh restrictions in place. We have to remember that the purpose is to stop Mr. Moneybags from buying an election.”

Although Uppal told reporters he hopes NDP leadership candidates will uphold the “spirit” of the legislation even if the bill is not retroactive and, unless amended, won’t apply before the party’s March 24 leadership convention, Martin said he expects his fellow New Democrats to abide by the letter of the law as it exists today.

“I think he’s playing silly bugger when he took that jab there,” he said. “It’s unfair to ask people to restructure their whole political campaign because a new legislation has been alluded to.”

One NDP candidate, Nova Scotia businessman Martin Singh, has already lent himself $35,000 at an interest rate of 5.5 per cent.

Brian Topp, the only other candidate who so far has filed a registration report with Elections Canada, obtained a $50,000 loan at 4 per cent interest from the Creative Arts Savings & Credit Union.

The Liberals, however, who face a leadership race in 2013 will have to abide by the new rules.

The bill announced Wednesday is the exact same bill the Tories tried to introduce in 2010. It caps the total amount individuals can lend at the current donation limit, $1,100 in 2011 and $1,200 in 2012.

And although critics have suggested the legislation would make it difficult for poorer individuals, people with bad credit and, in some cases women, from becoming candidates, Uppal dismissed that notion saying people could get loans from all types of financial institutions, such as credit unions and trusts.

Martin said the bill was a good first step.

“I support this bill, I think it is a necessary amendment to plug a longstanding loophole that we missed when we tried to reform the election financing regime. We have to take big money out of politics,” he said.

The Tories, however, Martin said, could have used the opportunity to introduce more comprehensive legislation on political financing.

“They’ve taken away the $2 per vote public subsidy and done nothing to replace that. I’m not saying this measure is free of politics, but it is an improvement.”

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