A whopping $829,000 loan writeoff to one of Canada’s smallest parties has once again raised questions about legal loopholes that allow people to lend politicians and their organizations large sums of money.
Paul Hellyer, the founder of the Canadian Action Party, wrote off the $750,000 loan plus interest he made to start up the party in 1997. As the ultimate wayfarer in Canadian politics, with time in four different parties, he’d had his share of financial ups and downs. But this last one was a doozy.
"They told me last year that there was no way they (the party) could pay it. . . . I just told my accountant to write it off," Hellyer said.
"It seemed expedient at the time."
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.
Some laws were made to be broken, and campaign finance laws especially so.
The law could be changed to deem written off loans to be contributions, but then, who would ever lend another campaign money after that? Why carry bad loans on the books for years just to avoid being caught by the campaign finance laws, and possibly, by CRA?
This loophole will not be closed any time soon, because none of the parties involved have an interest in closing it.
Source: Halifax Chronicle-Herald