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Trudeau rebuffs calls to Mention ministers who Employed loophole for Resources

31 Oct 17
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Prime Minister Justin Trudeau rejected continued resistance demands on Monday to disclose the names of other cabinet ministers who used the identical loophole as Finance Minister Bill Morneau to prevent divesting private investments or placing them in a blind trust.

The Office of Conflict of Interest and Ethics Commissioner Mary Dawson told The Globe and Mail that a couple of cabinet ministers have been able to retain control of resources they would be asked to divest whether that wealth wasn’t held indirectly through a holding company or similar mechanism.

Ms. Dawson’s office, citing confidentiality rules, declined to recognize the ministers but said “fewer than five cabinet ministers now hold controlled assets {}”

The problem, first reported by the Planet on Monday, dominated the Commons Question Period.

Opposition Leader Andrew Scheer pressed Mr. Trudeau to name another cabinet ministers “using exactly the same loophole. It’s a really simple question. Who are they?”

Mr. Trudeau would not disclose any names despite numerous requests from opposition MPs, calling the line of question nothing but “petty personal attacks.”

“The Finance Minister, all ministers in this House … follow the advice and recommendations of the Conflict of Interest Commissioner,” the Prime Minister told the Commons. “The conflict of interest and ethics commissioner is there to make sure that, above all these petty personal attacks, Canadians can be assured that people follow the rules{}”

The refusal of the Ms. Dawson and the Prime Minister to disclose names make it difficult to know for sure who’s using the loophole.

“This is some type of shell game going on where you must guess at who might or might not be in a conflict of interest,” NDP ethics critic Nathan Cullen told reporters.

Conflict-of-interest filings for Justice Minister Judy Wilson-Rayboud and International Trade Minister François-Philippe Champagne reveal they have interests in private businesses but their offices say they don’t directly or indirectly hold publicly traded stocks. Veterans Affairs Minister Seamus O’Regan has publicly traded securities at a retirement account and his filing with the integrity commissioner shows they haven’t been divested or place in a blind trust.

Conflict-of-interest legislation in Canada requires cabinet ministers to divest assets such as publicly traded stocks by selling them in an arm-length transaction or placing them in a blind trust until they leave office. The exception, according to the integrity commissioner’s office, is if these stocks or comparable assets are held indirectly through a holding company or similar mechanism.

Ms. Dawson had requested the Harper government in 2013 to change the law to remove this loophole however, the Conservatives failed to make her proposed change. The bipartisan Commons ethics committee passed a motion on Monday to examine reforms to the Conflict of Interest Act.

Finance Minister Bill Morneau used that loophole to put one million shares of Morneau Shepell at a numbered Alberta firm after his election to parliament in 2015. The minister faced mounting criticism after The Globe revealed Oct. 16 that he hadn’t put his holdings in a blind trust. Mr. Morneau has since reversed course and announced he would put all his assets in a blind trust, sell off his whole portfolio of Morneau Shepell stocks and donate to charity the $5.3-million in gain those stocks had earned because he became Finance Minister.

Ms. Dawson is also reviewing Mr. Morneau’s participation in drafting Bill C-27, which proposes changes to personal pensions which could benefit significant players at the human-resources and pension-management sector including Morneau Shepell.

Mr. Moreneau’s stocks in Morneau Shepell climbed by almost $1-million in value from the first couple of days after he introduced legislation to rewrite federal pension law which he had championed and advocated for some time still in the private sector.

When he was executive seat of Morneau Shepell, the organization sponsored a Public Policy Forum summit on pension reform in October, 2014, that spoke up the steps he included in Bill C-27.

Back then, 1 year before winning office, Mr. Morneau delivered a keynote speech lauding the benefits of moving away from defined-benefit retirement plans to target-benefit plans, which reduced the monetary liability for companies by shifting risk to workers .

“In a world where the wider public sector and a couple of large corporations have [defined-benefit] plans, and taxpayers are feeling very stressed in their financial situation, it’ll not be easy for government to address these plans in their present design,” he explained. “Reducing the costs of those programs, by considering ideas like target-benefit plans or shared-risk pensions, which restricts the guarantee and the decrease the price, may be the best way to prolong the very positive security component of these plans.”

C-27 would enable federally regulated companies to make target-benefit pension plans and the opposition parties assert Morneau Shepell stands to gain because existing customers may want to change to target-benefit programs from defined-benefit plans. Additionally, critics say, the new laws would require actuarial valuations each year, which may also mean more work for businesses like Morneau Shepell.

The proposed law was tabled on Oct. 19, 2016. That day, Morneau Shepell shares opened trading at $19.48. On Monday, the shares closed at $21.44, which means Mr. Morneau’s one million shares are worth in excess of $1.9-million over the afternoon C-27 was tabled.

The same day its former executive chairman tabled Bill C-27 in 2016, Morneau Shepell released a statement praising the bill as a “positive step that could increase the development of these kinds of plans throughout the country.”

Last Friday, Morneau Shepell released another statement saying it didn’t lobby Ottawa on Bill C-27 and claimed that the effects of the legislation is “not expected to have a material impact on the company.”

Courtesy: The Globe And Mail

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