The billionaire chairman of pharmaceutical giant Apotex has pulled out of an elite "cash for access" fundraiser at which Finance Minister Bill Morneau is the star attraction – two days after the Liberal Party sent a letter to cabinet announcing it plans to ban business executives or others from attending fundraisers if they are lobbying the government.
Barry Sherman's involvement in the exclusive $500-per-ticket Morneau event, set for Monday night, is already under investigation by federal Lobbying Commissioner Karen Shepherd. The Lobbying Act forbids lobbyists doing business with Ottawa from selling tickets or organizing party fundraisers if it creates an obligation for a public office holder.
The Globe and Mail has reported Mr. Sherman was organizing and selling tickets to the event, at the Yorkville home of philanthropist Nancy Pencer and funeral-home executive Michael Benjamin.
Apotex has lobbied the finance department on three occasions in the past six months as well as other senior ministers. Apotex is also suing the federal government for $500-million for banning the firm's drug imports from India. Mr. Morneau sits on the federal cabinet committee on litigation management, which deals with lawsuits against Ottawa.
"To avoid becoming a distraction for the event, Mr. Sherman removed himself from any volunteer involvement with the event and he will not be in attendance," Liberal Party spokesperson Braeden Caley wrote in an e-mail to The Globe.
"It is also important to note that individuals engaged in lobbying activity are subject to the Lobbying Act, and responsible for following its rules and disclosing any such activity."
This measure to ban those lobbying the government from attending Liberal fundraisers is the first evidence that the party is actively taking steps to change how these events are conducted since The Globe and Mail began reporting on them last month.
The Globe has revealed a Liberal party cash-for-access system where senior cabinet ministers in charge of major spending or policy making are prize guests at private homes or hotels where people are paying up to $1,500 per ticket.
These exclusive events appear to violate Prime Minister Justin Trudeau's Open and Accountable Government rulebook, which states "there should be no preferential access to government, or appearance of preferential access" in exchange for political donations.
The fundraisers have been denounced by ethics commissioner Mary Dawson as "not very savoury" and become the subject of intense focus in the House of Commons.
The Conservatives have a motion before Parliament – backed by the NDP – to transfer the Trudeau rules on fundraising and lobbying to Ms. Dawson's office, which would give her the force of law to enforce them. Liberal MPs have spoken out against the motion during the Commons debate, although on Thursday Mr. Trudeau opened the door to further reform. He had been asked whether he would consider a cap on the $1,500 limit, curb fundraising during elections or a return to the per-vote public subsidy – and responded he is willing to have a discussion on making improvements.
The Liberals' national director, Christina Topp, outlined what appeared to be new rules that say any donors who are registered as lobbyists should not be able to buy a ticket to an event if the minister or parliamentary secretary they are lobbying is attending. "There is a thorough process to ensure that the rules are followed – especially that no departmental stakeholders, lobbyists, or employees of lobbying firms are specifically targeted for fundraising," she wrote in the letter sent to Liberal cabinet ministers and parliamentary secretaries on Friday.
These rules were not applied when Mr. Morneau attended a $1,500-a-ticket fundraiser on Oct. 13 at the home of a mining tycoon in Halifax attended by bankers, mortgage brokers and a member of the Halifax Port Authority. The port is considering asking Ottawa for up to $1-billion as part of a plan for a new harbour to handle super ships.
Mr. Morneau was also scheduled to attend another $1,500 fundraiser in Calgary on Nov. 2 at the home of Shaw Communications president Jay Mehr. The telecom firm has directly lobbied Mr. Morneau's department eight times.
The event was cancelled due to scheduling issues, according to the Liberal Party.
In her letter, Ms. Topp said it's "important to note that political fundraising is explicitly permitted by the law" but insisted that Liberal "fundraising events are partisan functions where we do not discuss business."
The style of fundraising, also known as pay-to-play access, has been controversial this year at the provincial level. Ontario Premier Kathleen Wynne unveiled campaign reforms after The Globe revealed that corporations and lobbyists paid thousands of dollars for exclusive ministerial access. B.C. Premier Christy Clark faced complaints for attending similar events.
After Ontario banned ministers and MPs from attending the fundraisers, an Ontario Liberal source told The Globe that the Trudeau Liberals complained. The high-ranking Ontario Liberal said Trudeau advisers were upset that the move would make their federal cousins look bad and force them to follow suit.
Mr. Morneau defended the fundraisers in an interview with CTV's Question Period. He played down the access that people paying as much as $1,500 a ticket get to him at these events.
"Access is available irrespective of whether you are going to a fundraiser or not … I am out across the country at prebudget consultations pretty well every day talking to Canadians," the Finance Minister said.
Mr. Morneau's event is the kind of fundraising that Ms. Dawson, the ethics commissioner, has urged Parliament to crack down on. In June, she called for tougher fundraising laws that would address cases of ministers selling access for party donations.
But the Finance Minister told CTV that federal fundraising laws are already tough – at least compared to those of the provinces.
"We have the strictest laws in the country federally around fundraising. Those laws have been put in place so that we make sure we are not doing anything that could be construed as giving preferential access – because it's relatively small amounts."
Asked why Mr. Trudeau nevertheless promised to do even better when he took office, Mr. Morneau replied: "I think what the Prime Minister wanted to do is have clarity that we are going to be an open and accessible government." He repeated that the Liberal government is open to hearing from Canadians every day.