News

Prime Minister Paul Martin said today Finance Minister Ralph Goodale will not resign because of the RCMP decision Wednesday to launch a criminal investigation into whether advance notice of Ottawa's plans for income trusts leaked from the federal Liberal government.

The Conservatives and New Democrats immediately attacked the Liberal leader's position.

"He is a person of the greatest integrity, and he will not be stepping down," Mr. Martin said during a campaign photo op this morning.

"The RCMP has said there is no evidence of wrongdoing on Mr. Goodale's behalf, his office or his department," Mr. Martin said. "I have full confidence in Ralph Goodale. I believe that an investigation — as does he — will clear the air, including the allegation as to whether or not a leak actually took place."

Opposition parties have speculated that a leak last month fuelled insider trading, and said today that the federal Finance Minister has no choice but to step aside until the probe is completed.

Trading of income trusts and related stocks spiked in the hours preceding a greatly anticipated announcement by Mr. Goodale on Nov. 23. The news, which helped shape the future market for trusts, was that Ottawa would not slap a tax on the investment vehicle, as feared, but would enact a politically popular cut in corporate dividend taxes to reduce an advantage that trusts have had in the market.

Conservative Leader Stephen Harper was asked today whether it's possible that unusual market activity was based only on the knowledge that Mr. Goodale was going to make an announcement later that day.

"People usually don't invest that kind of money on speculation of a government decision unless they have pretty good reason (to think) that it's going to occur," he replied.

"I can tell you, having been in contact with some market players in the days preceding that decision, that decision was not widely anticipated.

"Any explanation is possible, but quite frankly, this government with its record of scandal and failure to accept accountability, this government has not earned its right to the benefit of doubt."

NDP Leader Jack Layton also demanded today that Mr. Goodale step down, telling a campaign stop in Toronto that he "expected better" of the finance minister.

The RCMP announced Wednesday that it has commenced a probe after reviewing allegations by an NDP MP.

"Given the seriousness of the allegations, the RCMP is now undertaking a criminal investigation of this matter," the Royal Canadian Mounted Police said in a statement.

But the Mounties emphasized that they'd seen no evidence of wrongdoing to date. "The RCMP wishes to note that at this time there is no evidence of wrongdoing or illegal activity on the part of anyone associated to this investigation, including the Minister of Finance Ralph Goodale."

Mr. Goodale has refused to resign, saying that he and his deputy minister investigated whether a leak occurred and came up empty. "We found no indication of any inappropriate communication."

He refused to lash back at opposition parties calling for him to step down, but suggested they were electioneering. "This is an election campaign and politicians will do what politicians do, but I do not intend to . . . respond in kind because this is an issue that I just take too seriously to be treated as the ordinary, run-of-the-mill political football in the middle of an election campaign," Mr. Goodale said.

Mr. Goodale said he takes allegations very seriously. "I think it's clear from my 30 years in public life that I take very seriously matters related to character and reputation and integrity. Nothing to me is more important than that."

Mr. Goodale, whom Mr. Justice John Gomery once lauded for helping clean up federal advertising contracting after the sponsorship scandal, said news of the criminal probe midway through the campaign for the Jan. 23 election is "obviously unsettling." But he said he would co-operate with the probe.

"I welcome it to bring this matter to a head and get it cleared away and I hope that can be done very quickly."

RCMP spokesperson Nathalie Deschênes would not identify specific targets of the investigation or say whom the RCMP planned to question. "We'll do whatever we have to do to determine whether we have sufficient evidence to lay criminal charges."

Toronto forensic accountant Al Rosen said he was not surprised a criminal investigation had been launched. Mr. Rosen has examined the trading records of several stocks and income trusts on the day the government announced the policy changes. "My guess was that there was an over 90 per cent probability of insider trading," he said. "It required an investigation."

Mr. Rosen said trading records suggest unusual price movements and volume levels in both dividend stocks and income trusts and that the trading was being driven by certain Bay Street firms.

"Obviously it's a deep concern about integrity," he said.

Mr. Rosen said the investigation should focus on both the source of the alleged leak and who would have benefited from information.