The Liberals are demanding MP Stockwell Day resign from cabinet after documents surfaced Thursday that allege another MP was paid up to $50,000 to step aside in 2000 and let Day run in his riding.

The Liberals are asking the RCMP to investigate the allegations, and say Day cannot continue as the Conservative's public safety minister in the interim, since the Department of Public Safety oversees the RCMP.

Public Saftey Minister Stockwell Day, heading for the House of Commons for question period in Ottawa on Thursday, said an allegation that another MP was paid to let Day run in 2000 is a "driveby smear."
(Fred Chartrand/Canadian Press)

Day denies any wrongdoing and calls the allegations a "drive-by smear."

The allegations centre on events seven years ago when Day was elected leader of the now-defunct Canadian Alliance party. Day, who wasn't an MP at the time, had no riding and no seat in the House of Commons.

Fellow Alliance MP Jim Hart offered to step aside in the Okanagan-Coquihalla riding in British Columbia, forcing a byelection. Day won that byelection handily on Sept. 11, 2000.

On Thursday, Liberal MP Mark Holland alleged his party has found faxes that show Hart made a $50,000 compensation deal with the Canadian Alliance party to resign. If proven to be true, this would be a criminal offence.

"These allegations are indeed very serious," Holland said. "Someone who is responsible for our lead law-enforcement agency, I think it is incumbent upon him to step down until such time as these allegations are answered."

Holland said the Liberals recently found the documents in one of their offices — the Office of the Leader of the Opposition. The office used to be occupied by the Alliance, the Official Opposition from 2000 to 2003.

Among the documents the Liberals say they found was a fax allegedly written by Hart and sent to Glenn McMurray, former executive director of the Canadian Alliance. The fax, which outlines Hart's expectations for $50,000, was dated July 15, 2000, two days before he officially resigned.

In a followup memo, dated Aug. 22, 2000, Hart allegedly complains that he had only received $6,000 of his money.

"My resignation was contingent upon this negotiation," he allegedly wrote.

Day refuses to step aside

Another page appears to approve the payment of $20,000 to Hart to cover his living expenses while he waited to start another job. Half of the payment was to be covered by the Canadian Alliance Party, while the rest was to be covered by the Office of the Leader of the Opposition, the document reportedly says.

Day, speaking in question period at the House of Commons, would not heed the call to step aside.

"The last time the Liberals tried this drive-by smear, the RCMP determined no criminal offence took place," he said on Thursday.

The RCMP did look into similar complaints of a compensation package in 2001. At the time, the RCMP said there was not enough evidence to launch a formal investigation.

Hart has always maintained he stepped aside for personal reasons, not for financial gain. In 2000, he said he was resigning because the timing was right, as his wife was expecting a child.

Hart has since moved to the Republic of Georgia and could not be reached Thursday.

The Canadian Alliance, which formed in 2000, merged with the Conservatives in December 2003 to form the new Conservative Party of Canada.

The new Conservatives ousted the Liberals from power in the January 2006 election, forcing the Liberals to take over as the Opposition.

With files from the Canadian Press