Skip to main content

Minister of Finance Bill Morneau stands during question period in the House of Commons on Oct. 23, 2017.Sean Kilpatrick/The Canadian Press

The Trudeau government is facing pressure to close a conflict-of-interest loophole that allowed Finance Minister Bill Morneau to retain close control over a significant stake in his family company even as he ran a department with significant power to affect the fortunes of Morneau Shepell.

The opposition NDP and Conservative parties are uniting to press a motion that would censure Mr. Morneau and urge Ottawa to rewrite conflict-of-interest law to eliminate this exception.

Mr. Morneau has since reversed course and promised to sell all his shares in Morneau Shepell – and put all other assets in a blind trust – but the Trudeau government has not directly answered repeated questions on whether it would amend the legal loophole that allowed this.

The NDP introduced a motion on Monday, to be voted on Tuesday, which urges the Liberals to act on this exception. The Conservatives have indicated they will support the motion. Mr. Trudeau's majority in the Commons means the Liberals can easily kill the motion but this would risk embarrassing them for rejecting a proposal to strengthen conflict-of-interest-law.

The motion calls on the Liberal government "to immediately close the loopholes in the Conflict of Interest Act as recommended by the Conflict of Interest and Ethics Commissioner, in order to prevent a Minister of the Crown from personally benefiting from their position or creating the perception thereof."

As The Globe and Mail first reported last week, Mr. Morneau ran the Finance Department for nearly two years without putting his substantial assets into a blind trust – as Justin Trudeau did for his family fortune, a move that the Prime Minister holds up as the gold standard for avoiding conflicts of interest in federal politics.

These assets included about one million shares of Morneau Shepell, one of four major players in Canada's human-resources and pension-management sector.

Ethics Commissioner Mary Dawson's office said last week that Mr. Morneau was able to keep the shares and avoid a blind trust because he held the shares indirectly through a holding corporation. "This divestment requirement does not apply to any controlled assets that reporting public-office holders hold indirectly, through a holding company or other similar mechanism," Ms. Dawson's office has explained.

The ethics watchdog also revealed that she had previously asked Ottawa to change the law to eliminate this loophole. She made recommendations during the Harper government's time in power and the Conservatives failed to make her suggested change.

Pressed for more details regarding his financial arrangements, Mr. Morneau rejected the opposition's entreaties.

"I know the members opposite are going to continue to focus on my personal finances. I am going to continue to focus on the finances of Canadians and of Canadian families"

Conservative MP Shannon Stubbs asked why Mr. Morneau never recused himself from Bill C-27, legislation he sponsored that opposition parties say could be expected to benefit Morneau Shepell.

Bill C-27 would enable federally regulated businesses to create "target benefit" pension plans that lower the monetary liability for employers by shifting risk to employees. Mr. Morneau advocated for a shift to these plans when at Morneau Shepell and opposition parties argue the firm stands to benefit because existing clients might want to switch to target-benefit plans from defined-benefit plans. Also, critics say, the new legislation would require actuarial valuations every year, which could also mean more work.

"For the last two years, he introduced and crafted legislation that directly benefits himself and his billion-dollar family company. Why did the Finance Minister not recuse himself from all discussions about Bill C-27?" Ms. Stubbs said.

Liberal MP Kevin Lamoureux, parliamentary secretary to the Government House Leader, jumped to Mr. Morneau's defence Monday, accusing opposition parties of picking on the former Bay Street executive.

"Whenever the Conservatives or the NDP have any hint of an opportunity to be critical of this Minister of Finance, they have jumped all over it," Mr. Lamoureux said.

"The Conservatives are so out of touch with what Canadians want, and the NDP seems to so want to buy into the Conservative spin and the issues of the day, that they are going to vote with them – I would suggest that they are going in the wrong direction."

Finance Minister Bill Morneau is taking steps to end the controversy regarding his business assets and conflict of interest allegations. He says he plans to sell off his and his family's shares in the human resources firm Morneau Shepell.

The Canadian Press

Follow related authors and topics

Authors and topics you follow will be added to your personal news feed in Following.

Interact with The Globe