03/19/2013 05:14 EDT | Updated 05/19/2013 05:12 EDT

Early and spirited campaign for Penashue's seat erupts on Commons floor

OTTAWA - Prime Minister Stephen Harper led a spirited defence of beleaguered former minister Peter Penashue's re-election campaign Tuesday calling the ex-intergovernmental affairs minister "the best member of Parliament Labrador has ever had."

Penashue was compelled to quit his post last week after Elections Canada revealed records showing his 2011 campaign had received 28 illegal contributions. He later had to pay taxpayers nearly $48,000.

Despite admissions of wrongdoing by his campaign, Penashue will be running again in a byelection that has not yet been set, but the campaign was in full flight on the floor of the Commons Tuesday.

The Conservatives tried to sell his candidacy by emphasizing the torrent of federal investment that has been pumped into Labrador since Penashue was first elected in 2011 while the opposition NDP and Liberals hammered away at the circumstances that prompted his departure.

Opposition leader Thomas Mulcair wondered why a prime minister who was elected on a promise to clean up Ottawa's ethical lapses would allow Penashue to run again.

"If Penashue did nothing wrong, why did he resign? If he did something wrong, why is the prime minister allowing him to run again?"

Mulcair pointed out that Elections Canada's investigation of Penashue's campaign has not been completed despite the full-throttle pace of the former minister's re-election campaign.

He asked Harper to allow Elections Canada to finish its investigation of Penashue's campaign before the upcoming byelection in Labrador.

"Is it that he's afraid of what other illegal activities might come to light?"

Penashue was the Conservative government's lone MP from Newfoundland and Labrador after emerging as a surprise victor over the Liberals in the vast riding by a mere 79 votes.

Harper attempted to make a virtue of Penashue's decision to step down and face the electorate.

"Mr. Penashue has done the right thing under difficult circumstances and he is prepared to take his record and be accountable to the people of Labrador."

Penashue quit his post as minister of intergovernmental affairs after admitting his campaign accepted donations exceeding campaign laws that were taken in by an "inexperienced volunteer." He insisted he did so unwittingly.

He later had to pay the Receiver General nearly $48,000. Candidates in this position have a choice of either paying back the ineligible donors or paying the ineligible amount to the treasury. "The prime minister is refusing to admit that his member of parliament broke the law," said interim Liberal leader Bob Rae.

The Conservatives shot back by listing Penashue's support for the Muskrat Falls hydroelectric project in Central Labrador, paving the trans-Labrador highway and his defence of the seal hunt.