Ethics Commissioner launches examination of alleged Morneau conflict over pension bill

Share

Ethics Commissioner Mary Dawson is officially examining whether Finance Minister Bill Morneau contravened Canada's ethics laws when he introduced pension legislation that could potentially benefit his former company.

Conservative and NDP MPs had asked Ms. Dawson to consider whether Mr. Morneau placed himself in a conflict of interest by introducing Bill C-27, legislation that would allow for a new type of pension called target benefit plans.

"It's as serious as it gets," said NDP MP Nathan Cullen. "If he doesn't come clean on all of the assets that he owns, I don't know how he can look Canadians in the eye and continue to be finance minister."

When the legislation was introduced in October 2016, Morneau Shepell, a human resources company, praised the legislation as a "positive step." Morneau Shepell describes itself as the largest provider of pension administration technology and services in Canada.

Mr. Morneau stepped down as executive chair of Morneau Shepell in October 2015. During his time at Morneau Shepell he advocated for target benefit plans, which had been under consideration by the previous Conservative government.

When Mr. Morneau introduced C-27, it was widely believed that he had placed his assets - including shares in Morneau Shepell - in a blind trust.

However the Globe and Mail first reported last month that he did not set up a blind trust, nor did he divest his assets.

That revelation left Mr. Morneau on the defensive for weeks as he faced repeated questions related to ethics and conflicts of interests. The questions coincided with a controversial policy move by Mr. Morneau to tighten tax rules on small business owners. Critics accused Mr. Morneau and Prime Minister Justin Trudeau - who are both personally wealthy - of being out-of-touch with regular Canadians.

Mr. Morneau's response has been that he has consistently followed Ms. Dawson's advice and instead used an ethics screen in which his chief of staff was assigned to ensure the minister was not placed in a conflict of interest.

A spokesperson for Mr. Morneau, Chloé Luciani-Girouard, said the minister will cooperate with the examination.

"Since the first day in office, the minister of finance has worked with the conflict of interest and ethics commissioner and followed her recommendations and advice, including having a screen in place that was determined to be the 'best measure of compliance' by the commissioner," she wrote in an email to The Globe. "In this spirit, the Minister will answer any questions the commissioner has on this matter."

In a letter to Conservative MP Pierre Poilievre, Ms. Dawson confirms that she is launching an examination, which is a form of investigation. The language in the Act refers to examinations rather than using the term investigation.

"I have reasonable grounds to commence an examination under subsetion 45(1) [of the Conflict of Interest Act], and have so informed Minister Morneau," Ms. Dawson wrote in a letter to Conservative MP Pierre Poilievre.

That section of the Act states that the commissioner may examine a matter on his or her initiative if there is reason to believe that there has been a contravention of the Act. The letter does not state what part of the Act might have been contravened.

One of the stated purposes of the Act is to minimize the possibility of conflicts arising between the private interests and public duties of government officials.

In an interview, Mr. Poilievre said the minister should not have introduced the bill.

"This is an important step to ensure accountability. The minister demonstrated terrible judgment putting forward a very highly-specialized pension bill that would make available financial products that his former company specializes in providing," he said.

On Oct. 19, Mr. Morneau held a news conference to announce that while he had followed the commissioner's advice, he felt the need to do more in response to concerns over his personal situation.

He said he would sell off his and his family's shares in Morneau Shepell and that any other assets would be placed in a blind trust.

A week later, he announced that he would donate more than $5-million to charity, representing the amount earned on his Morneau Shepell shares since he was elected in 2015.

Mr. Morneau announced that decision on the floor of the House of Commons.

"For me, the work I am doing right now is the most important work that I will ever do, and I want to make sure Canadians have confidence in that work," he told MPs.

The House of Commons is currently on a short recess. MPs return to Ottawa on Nov. 20.