OTTAWA — Interim Liberal leader Bob Rae has accused Intergovernmental Affairs Minister Peter Penashue of buying his seat in 2011, and is demanding a byelection.

Rae and other opposition politicians slammed Penashue in the Commons on Wednesday after a media report raised new questions about the Labrador MP's spending in the last election. Penashue won the riding by a small margin - 79 votes.

"Instead of buying elections, why not a byelection," Rae asked the government during question period. "There is substantial evidence now that there has been overspending in the last election by the member from Labrador, the minister for intergovernmental affairs, by over $20,000."

Todd Russell, the former Labrador Grit MP who ran against Penashue, says his team long suspected the election playing field was not equal during the campaign.

"There is no doubt in mind that in fact money was a factor in the outcome of this election," Russell said in an interview with QMI Agency. "Rules were there and rules were broken ... if you are going to lose, you want to lose in a fair way. You don't want somebody cheating."

Penashue's former campaign manager, Reginald Bower, issued an apology this summer for oversights in Elections Canada paperwork after it was learned the campaign team spent nearly $4,000 more than the legal election spending limit.

But new accusations in a CBC report, citing Elections Canada documents, suggest a sweetheart deal Penashue's team arranged with a Labrador airline during the 2011 election campaign. The quoted documents suggest Provincial Airlines wrote off more than $7,000 in flights.

Prime Minister Stephen Harper did not respond to the new accusations in the House and suggested Penashue wasn't the person to blame for the MP's election spending issues.

"There were errors in the filings of the official agent in this case. That is the individual responsible. A new official agent was named. That agent has been working for some time with Elections Canada to correct these problems," Harper said.

Rae says this is not "simply a question for Elections Canada" and says this raises questions about Harper's standards regarding Conservative candidates.

The NDP says it has serious questions about Penashue's election spending but it has not demanded the minister's resignation.

Penashue also received a loan from the Innu Development Limited Partnership (IDLP), a company designed to spark business and development in two Innu communities. Penashue's brother-in-law, Paul Rich, recently stepped down as its CEO after community members questioned his salary of more than $1 million over two years.