One Big Loophole

The CP reports on the current financial status of Canadian political parties based on their recent filings with Elections Canada. There isn't much new or unexpected from most of the parties. But it looks like the main influence of Paul Hellyer and the Canadian Action Party may be to set a precedent which leads directly to campaign funding abuses:

The Canadian Action Party showed a surplus of $19,444 after party founder Paul Hellyer forgave a stunning $829,296 loan to the organization. The party received $131,969 from Canadian donations.

Now, as long as it's only the CAP receiving such a large windfall through what was supposed to be a loan originally, it's easy to conclude that Hellyer's money hasn't had a ton of influence yet. But the problem comes if other parties follow the CAP's lead.

Keep in mind that the Lib leadership race is largely being funded by loans, primarily from personal supporters rather than financial institutions. And remember also that the other parties blocked the NDP's efforts to include a restriction on private loans to political parties within the Accountability Act. Add those factors up, and there are clear indications that some parties both want to leave the door open to leave the door wide open to private loans, and are already taking full advantage of their apparent present ability to do so.

Of course, the forgiveness of a large personal loan is a step beyond what the major parties seem to be involved in at the moment. But if a donor to the CAP is able to forgive a huge loan without being affected by personal donation caps, there doesn't seem to be any principled reason why the same wouldn't apply to donors to (or creditors of) the other parties as well.

In sum, if the CAP is able to receive what ultimately amounts to a massive personal donation simply by including a loan as a step in the process, it's hard to believe it'll take long for other parties to follow suit. Which means that if some action isn't taken to investigate the legitimacy of the forgiven loan (or provide an explanation which would ensure that other parties can't follow suit), the effect may be to completely undermine Canada's campaign financing laws.