Certainly, the Bank of Canada’s policy of restricting money was offsetting the government’s intent of boosting the economy through budgetary deficits. Such a conflict might have been ironed out privately and if that was impossible, then the governor could have resigned.
But the Conservatives chose not to take this course. Instead, Mr. Fleming argued that Mr. Coyne should have brought a proposed $13,000 increase in his pension to the attention of the government. Mr. Coyne countered that Mr. Fleming had a representative at the meeting where the bank’s board authorized the increase and he should have known about Mr. Coyne’s pension.
The prime minister argued that Mr. Coyne had a moral obligation to veto the pension increase, so the Tories introduced Bill C-114 to the Commons on June 23, 1961. It had but one sentence: “The office of Governor of the Bank of Canada shall be deemed to have been vacant immediately upon the coming into force of this act.”
During the debate, Mr. Diefenbaker rose in the House to say that personal attacks were not his style but is it “impugning a man’s integrity to say that he sat, knew, listened and took?”
He also mentioned the pension of former prime minister Louis St. Laurent “who gave devoted service to his country for the greater part of nine years as prime minister.” He, Mr. Diefenbaker noted, was receiving a pension of less than $3,000 a year compared to Mr. Coyne’s $25,000.
“How many people in public life receive a pension of that size? I have been in public life longer than Mr. Coyne. When I retire, no matter how many years from now it may be, I will be in the same position as Mr. St. Laurent.” (Mr. Diefenbaker never retired and served as a member of Parliament until he died in 1979.) The Tory-dominated Commons approved the bill but the Liberal-dominated Senate referred it to a committee where Mr. Coyne got a hearing. Although acknowledging that he had been a troublesome governor, the Senate rejected the bill and Mr. Coyne resigned.
When asked how important it was to his father that the bill declaring his father dishonourable failed in the Senate, Andrew Coyne replied: “The biggest mistake that Mr. Diefenbaker made was to go after my dad’s integrity – a losing proposition to begin with – and if he ever wanted to get my dad’s back up, that was the way to do it. He was the most fundamentally honest person I have ever met in my entire life and that is integral to understanding him.”
The Coyne children were too young at the time of The Coyne Affair to understand its political machinations. What they did absorb, either by osmosis or genetics, was the significance of morality as a guiding human principle. “One of the things I was aware of at a very, very early age was that on questions of principle it was a fine and honourable thing to stand your ground,” said Andrew Coyne.
“What I learned from him, is that the truth matters at all costs,” said Susan Coyne. “It is a primary value. My father certainly lived his life by that principle and paid some costs for it as well.”
Mr. Coyne resigned from the bank on July 13, 1961. He and his family left Ottawa in December and moved to Toronto because Mr. Coyne had been hired by Sinclair Stevens (then a self-made financial whiz kid on Bay Street in Toronto with an investment empire that at one time was said to be worth $130-million and who later served as a cabinet minister for Brian Mulroney in the 1980s) to work as chairman of the board of York Trust, a company he had established in 1962 with funds from his investment company British International Finance (Canada) Ltd. Mr. Coyne joined the following year.
Mr. Steven’s company York Trust had its first office at the corner of Danforth and Pape, in the eastern end of Toronto and away from Bay Street, the city’s traditional financial and corporate canyon.
The two men had also developed a plan to launch the Bank of Western Canada or Westbank, based on Mr. Coyne’s reputation and connections in the west and Mr. Stevens’s financial resources and his ability to raise money in Toronto.
Within five years, Mr. Coyne was back in the news because of another very public ethical dispute – this time with his business colleague rather than his prime minister. Later, Mr. Stevens said that Mr. Coyne was a very bright man, perhaps a genius, who had a tendency to “walk into a buzz saw rather than change his position.” And that refusal to “mellow,” according to Mr. Stevens, left him, like Mr. Diefenbaker before him, “a victim” of Mr. Coyne’s “inflexibility.”