Liberals won't face courts over 2006 leadership loans

Former candidates who still owe money from the 2006 Liberal leadership campaign won't be taken to court by Elections Canada, the country's elections commissioner has ruled.

Instead, Yves Cote suggested Tuesday that the candidates pay the money back in a timely manner.

The Harper Conservatives have been demanding that Elections Canada impose penalties on Liberals who have failed to pay back loans taken out during their December 2006 leadership contest.

They called Cote's decision "absolutely shameful," referring to the owed money as "illegal political donations disguised as loans."

"Instead of letting Liberal leadership candidates off the hook for hundreds of thousands in illegal donations, it is time for Elections Canada to launch a thorough and proper investigation to preserve the integrity of our electoral system," Conservative Party communications director Fred DeLorey said in a statement.

But the law as it is currently written is unenforceable, Cote said.

"The commissioner has concluded that the act, as currently drafted, lacks sufficient clarity to support enforcement action in the criminal courts with respect to loans or claims that remain unpaid following the expiry of an extension," Elections Canada said in a statement.

"Therefore, no enforcement action can be taken against the leadership contestants in relation to their unpaid debts."

As of Tuesday that is, nearly seven years after the leadership race in which Liberals picked Stephane Dion to lead them four candidates still owed money.

Dion owed the least, at $7,500 while Ken Dryden still owed a hefty $225,000.

Hedy Fry had $69,000 in outstanding debt while Joe Volpe had yet to repay $97,800.

The candidates were given several extensions of the original 18-month deadline to repay their loans.

Regardless of his ruling, Cote urged the candidates to pay back the owed money out of respect for the spirit of the law.

"Despite the difficulties in enforcing the (Canada Elections Act), I believe it is clear that Parliament intended that leadership contestants act diligently to repay their campaign expenses," said Cote.

"I strongly encourage the contestants involved to make every effort to raise funds through individual contributions, repay all outstanding debts and report all transactions to Elections Canada."

Legislation delayed

The Toriesintroduced legislation in November 2011designedto fix problemsthat chief electoral officer Marc Mayrand has said render the Canada Elections Act incoherent and ineffective.

But the proposed law has never been passed something the Liberals say needs to happen.

"We agree with (Elections Canada's) assessment that the system needs improvement and we are willing to work with other parties on suitable legislation," Liberal party national director Jeremy Broadhurst said in an email.

The Liberals partly blame the Conservatives for tying the hands of leadership candidates midway through the party's 2006 contest by reducing the maximum individual contributions that could be made to a candidate to $1,100 from $5,400.

Earlier this year, the federalLiberal party revamped its own rulesgoverning how much debt could be racked up by leadership candidates after some members were labelled as deadbeats for not paying back their 2006 loans.

Going beyond legal deadlines to pay back electoral loans is not uncommon for any party.

Elections Canada has not fined or jailed any of the candidates from the 2006, 2008 or 2011 elections, although 105 of them owed a combined $1.6 million beyond the 18-month deadline for repaying loans.

Some 18 months after the May 2011 general election, 39 candidates still owed a collective $741,326.