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Federal Accountability Action Plan, April 2006

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Banning secret donations to political candidates

Delivering on our commitment

  • A ban on candidates accepting gifts that might be seen as influencing them
  • A ban on transferring trust-fund money to candidates or political parties
  • Powers for the new Conflict of Interest and Ethics Commissioner to order that trusts not be used for political purposes or be wound up

Newfoundland, Nova Scotia, New Brunswick, Ontario, Saskatchewan, and Alberta expressly regulate the use of trust funds in the electoral process. The level of regulation ranges from disclosure to mandatory termination.

Why we are doing this

While campaign donations are regulated, riding associations can still give large amounts of campaign money to candidates through trust funds. The Government of Canada will close loopholes in the current election laws by applying new restrictions on the use of trust funds and the receipt of gifts by candidates for federal political office.

The Federal Accountability Act will introduce the following changes:

  • The Act will prohibit candidates from accepting gifts that might reasonably be seen to risk influencing them in the performance of their elected duties. Candidates may accept gifts from relatives or gifts of courtesy or protocol.
  • It will require that candidates report to the Chief Electoral Officer any gifts they receive worth more than $500. Gifts received by will or from relatives will be excluded from this requirement. These restrictions on receiving gifts will apply from the time of a candidate’s nomination or on the day the writ is issued, whichever is earlier, and will end on polling day or when the elected candidate becomes a Member of Parliament. The rules governing the acceptance of gifts by Members of Parliament are provided for under the Conflict of Interest Code for Members of the House of Commons.
  • It will prohibit electoral district associations from transferring money to a candidate when that money is held in trust.
  • It will require Members of Parliament to report to the Conflict of Interest and Ethics Commissioner all private interests from which they derive benefit, including trusts, regardless of their value.
  • It will prohibit Members of Parliament from using trust funds for political purposes.
  • It will empower the Conflict of Interest and Ethics Commissioner to order Members of Parliament to wind up trust funds or handle them in any other manner that the Commissioner considers acceptable. Failure to comply with an order of the Commissioner will constitute an offence. Registered retirement savings plans and registered education savings plans will be exempt from this requirement.

What this means for Canadians

These changes will enhance public confidence in the electoral process by banning the use of trust funds to finance a candidate’s campaign. Greater transparency and fairness regarding political financing will be the result. The Government will heighten disclosure requirements regarding the personal finances of Members of Parliament, and hence reduce the risk of their holding problematic financial interests. These measures will allow Members of Parliament to hold legitimate financial instruments that do not influence their elected positions. 

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