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Trudeau comes to Morneau’s defence over Shortage of blind Hope for Resources

17 Oct 17
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Prime Minister Justin Trudeau is defending his Finance Minister within the ex-businessman’s decision not to place his substantial wealth in a blind trust when serving in public office, stating Bill Morneau just did as instructed by the Ethics Commissioner.

As The Globe and Mail reported Monday, Mr. Morneau, who’s one of the wealthiest members of the Trudeau Liberal cabinet, hasn’t put any assets in a blind trust that would be beyond his reach while he’s in office. Mr. Trudeau, on the other hand, has put his family’s fortune inside one — a move that the Prime Minister has championed as a substantial ethical measure.

Mr. Trudeau and Mr. Morneau looked at a joint news conference in Stouffville, Ont., on Monday to announce details of a tax cut for small companies, but a substantial amount of the questions from reporters concentrated instead on the Finance Minister’s fiscal arrangements.

The Prime Minister intercepted most of those queries, declaring, “I will take them.”

“You’ve got to ask a question of me — because you get an opportunity to speak to the Prime Minister,” Mr. Trudeau told one reporter, who said he had a direct question for Mr. Morneau. The Prime Minister later signaled Mr. Morneau could reply.

The Prime Minister placed responsibility for the lack of a blind trust on the shoulders of Ethics Commissioner Mary Dawson. “We have in Canada a Conflict of Interest and Ethics Commissioner who is mandated to guarantee everyone follows the rules … I will let you know the Minister of Finance worked extensively with [the Commissioner] when he came into this project and followed her recommendations.”

Mr. Morneau is facing another accusation of conflict of interest even as controversy lingers over his lack of a blind trust.

The New Democratic Party has written to the Ethics Commissioner, asking her to inquire why Mr. Morneau is permitted to sponsor legislation, Bill C-27, that makes significant changes to pension rules that, it asserts, could reasonably be expected to gain from human-resources firm he helmed, Morneau Shepell.

According to Canadian securities authorities’ disclosure system for corporate insiders, Mr. Morneau possessed 2.07 million common shares in Morneau Shepell in the time of the 2015 election — stocks that could be worth more than $43-million today. He will not say whether he still owns these shares.

In his filings with the federal Ethics Commissioner, Mr. Morneau revealed the presence of a single family trust, the Morneau-McCain family trust, but also said he is a possible beneficiary of the Nancy McCain 2013 Family Trust. Mr. Morneau, who had a successful career on Bay Street, married into much larger money through his partner, Nancy McCain, a member of the household that owns McCain Foods.

When national politicians take office, they generally face two choices: either put their straight regulated assets into a blind trust outside of their reach to insulate themselves from conflict-of-interest allegations or sell those resources in “an arm’s length transaction.”

Neither Ms. Dawson’s office nor Mr. Morneau will clarify why the Finance Minister has averted a blind hope that other public office holders are required to install.

He said Monday that he would place assets in a blind trust in the future if Ms. Dawson advised him to do this.

The Conservatives are utilizing their opposition day in the Commons this week to table a motion calling on Mr. Morneau to disclose all of the documents he provided to the Ethics Commissioner. While the Liberal-dominated Commons can easily defeat the motion, it retains the potential to embarrass Mr. Morneau.

Conservative finance critic Pierre Poilievre said when he held a junior standing from the Harper government, the Ethics Commissioner taught him to place assets in a blind trust.

“When I was a parliamentary secretary, I had a blind hope only for my meagre stock portfolio,” he remembered. He said he’s puzzled as to why Mr. Morneau will not disclose what happened to his Morneau Shepell shares. “The least we can ask of him is to tell us if he owns them.”

The New Democratic Party asserts that if Bill C-27 were to become law, Morneau Shepell would “significantly benefit in additional business and earnings,” NDP ethics critic Nathan Cullen wrote to the Ethics Commissioner.

The NDP asserts that Morneau Shepell, as one of Canada’s top pension and human-resources management companies, might be expected to be given a boost in business from C-27 because existing customers may want to change to target-benefit programs from defined-benefit plans. Additionally, the party states, the new laws would require actuarial valuations each year, which may also mean more work.

Reacting to the NDP’s allegations, Mr. Morneau said in a statement he follows Ms. Dawson’s advice on how he conducts himself. “I have been working with the Ethics Commissioner in my first day in office … I am prepared to take any further actions to prevent conflicts, or any perception of conflict, as deemed appropriate.”

His office said a conflict-of-interest display is set up to ensure Mr. Morneau abstains from any decision-making or conversation where the subject matter affects his private interests. This implies that his chief of staff is responsible for making sure this display operates properly.

Democracy Watch, a political-accountability advocacy group, is now challenging the use of conflict-of-interest displays in court, arguing they’re illegal because federal law doesn’t provide for these mechanisms and since they permit public-office holders to bypass having to disclose whenever they encounter a conflict of interest.

Duff Conacher, a creator of Democracy Watch, said Canada’s conflict-of-interest principles are weak.

“The federal ethics law actually should be called the almost-impossible-to-be-in-a-conflict-of-interest behave,” he said.

Mr. Morneau’s office pointed out that Bill C-27, as a piece of public law, is open for discussion, amendment and votes by all members of the House of Commons.

Former prime minister Paul Martin faced significant criticism for continuing to own Canada Steamship Lines even when he was finance minister and was campaigning to lead the Liberal Party. At the moment, he held the business in a blind-management trust, a mechanism which enabled him to get updates from the ethics commissioner at the moment. In August, 2003, he completed the transfer of the business to his three sons. Because this move was within his loved ones rather than to a different buyer, he was required to recuse himself from decisions which could affect CSL’s interests.

With a report from Josh O’Kane in Toronto

Courtesy: The Globe And Mail

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