Former Conservative leader Erin O'Toole said Wednesday he contemplated expelling a Conservative senator from his party's caucus over concerns that the senator was involved in foreign influence.

Testifying in Ottawa before the inquiry into foreign interference, O'Toole said one of his MPs was told by a local mayor that a Conservative senator was actively working on behalf of a Chinese government-owned company.

"There was a member of our upper chamber caucus that an MP brought to me that he had been directly or indirectly promoting or lobbying an interest of a Chinese state-owned enterprise in a riding in Ontario," O'Toole told the inquiry.

"There had been previous stories about sponsored travel and other things that led me to have some serious concerns considering some of the subjects that we were discussing within caucus. But it was that issue in a town in Ontario, potentially advocating for an economic interest, that really forced me to make a decision about some concerns about that member."

O'Toole said the senator took "a pretty extensive trip" to China, which had been the subject of media reports.

O'Toole said he felt it was "completely inappropriate for a member of the Senate to be advocating for a commercial interest related to a foreign entity in a riding in Canada."

"Given that we were having very serious discussions at the time with respect to the relationship with China, the situation with the two Michaels, the consideration of the plight of the Uyghur peoples, Hong Kong, I was very concerned about this member," he said.

O'Toole said he could have used help from the Canadian Security Intelligence Service or other government intelligence experts, but didn't have access to them.

"I was exploring removing this member from caucus but the challenge I had was I had no intelligence services support," he said. "I had allegations that I could not verify. I had no warnings from intelligence agencies that they were aware of it.

"And the concern that some of my caucus members expressed to me was that if I took a rash decision about removing the member, I could be accused of racism."

Unable to consult government security or intelligence experts, O'Toole said he settled for having the Conservative leader in the Senate give the senator in question a "stern talking-to."

O'Toole did not name the senator who was the focus of his concerns.

Conservative sources who spoke to CBC News said O'Toole was referring in his testimony to former Conservative senator Victor Oh, who was appointed by former prime minister Stephen Harper and retired in June. In 2020, the Senate ethics officer found that Oh broke the Senate's conflict of interest and ethics code when he accepted an all-expenses-paid trip to China in 2017.

Reached by CBC News, Oh said no one from the Senate had ever spoken to him about any concerns regarding China or "what I'm doing on promoting China." He said he thought O'Toole was "confused."

"I never promote any state-owned company in Ontario," he said. "No way. And even if I do so, those are for economy reasons for helping out the country."

During his testimony before the inquiry, O'Toole said political parties are vulnerable to attempts at foreign interference, something he said he flagged during the last federal election.

"There are these vulnerabilities and we need to know they exist, know that in some cases — limited cases — they are being exploited and find ways to buttress our democratic systems."

O'Toole said nomination contests in safe seats can determine who becomes the next MP.

"If there is manipulation or interference, parties should know that before someone walks in to take their oath and seat in the House of Commons."

O'Toole said the Liberal Party is particularly vulnerable.

"Because in that situation, there is no membership. There is no cost to join. If you supply an email address, you're in. If you get an organizer or a diaspora figure to just gather emails, you could have people voting or participating in a nomination contest who could be non-citizens, visiting students and are they there because they want to be there, because that's their choice or are they being marshalled or being pressured."

O'Toole's surprise testimony Wednesday came as the foreign interference inquiry, headed by Justice Marie-Josée Hogue, continued its second phase of hearings.

The inquiry was set up in response to media reports which accused China of interfering in the 2019 and 2021 federal elections.

In her initial report, made public in May, Hogue found that while it was possible that foreign interference occurred in a small number of ridings, she concluded it did not affect the overall election results.

In its second phase, the inquiry will focus on how equipped the government is to combat foreign interference in elections and how that capacity has evolved over time.

Earlier in the day, the inquiry heard from Conservative MP Michael Chong who was targeted by China. However, Chong was only told by CSIS well after the fact that a Chinese consular official in Toronto had been gathering information on him and his family to target him in the future – something he said he should have been told about at the time.

Chong said he was also concerned that intelligence gathered by CSIS and sent to the highest officials in Prime Minister Justin Trudeau's government wasn't read by key officials.

Chong also suggested the attempts at foreign interference are continuing. He said he was approached last year by a woman who offered to provide political support and assistance, however when he looked her up, he discovered she had been fired from her job in the Privy Council office over concerns she had been spying for China.

Chong also called for the names of parliamentarians referred to in a report by the National Security and Intelligence Committee of Parliamentarians who intentionally or unwittingly had participated in foreign interference to be made public, saying the public is now wondering which parliamentarians might have been involved.

Later, New Democrat MP Jenny Kwan echoed Chong's call to make the names public, saying she would like the House of Commons procedure and house affairs committee to hold hearings into the report's findings.

The inquiry continues Thursday with representatives of the NDP, the Green Party and the Bloc Québécois.