Electoral equalization

The CP follows up on the question of whether Paul Hellyer's forgiven loan to the Canadian Action Party may have already ushered in a strategy where political parties and candidates can take out loans with little to no intention of repaying them:

Hellyer calls it a bad loan, but critics say what happened is proof that what can start off as a loan to a party can end up being tantamount to a contribution, despite the fact the limit on individual donations will soon be only $1,000.

Several candidates for the leadership of the Liberal party are receiving loans from wealthy individuals.

Political financing rules enforced by Elections Canada require loans to be paid back within 18 months, with a commercial rate of interest applied. Extensions can be added indefinitely in order for candidates or parties to repay the money. But at some point, a creditor can simply declare the loan uncollectable after going through all possible avenues to recoup the cash.

NDP MP Pat Martin has been an energetic critic of the loans. He pushed unsuccessfully for the other parties to ban personal loans while reviewing the Conservative government's new Accountability Act.

"For all the world to see, it's candidates trying to circumvent the donation limits of the Elections Act with these de facto loans that aren't really loans if they can be written off and forgiven," Martin said.

"The whole process brings discredit to the electoral system because you've got big money buying undue influence in the campaign."

I'll note that I agree with the concerns of smaller parties that the current financing scheme fails to give them a fair shake when it comes to public funding. But that doesn't justify any party (or donor) in actions that could only open the door to even bigger long-term advantages for the larger parties. Hopefully the current public attention will lead to efforts to make sure that smaller parties are able to get needed funding through the same means properly available to the larger parties - and not in ways which already seem to have led to loopholes being adopted by the larger parties as well.