OTTAWA -- Conflict of Interest and Ethics Commissioner Mary Dawson has confirmed she has launched a formal investigation into whether Finance Minister Bill Morneau has broken federal ethics law over his sponsorship of Bill C-27.
"We always are as careful as we can be to use the word examination when we’re talking about having launched an examination. Otherwise, we say we’re looking into something. It’s because when the media gets that word 'investigation' they confuse it between the two activities so we avoid the word investigation," Dawson told CTV News.
In a letter to NDP ethics critic Nathan Cullen, provided first to CTV News, Dawson said she has "reasonable grounds" to "commence an examination" into whether Morneau contravened Canadian ethics laws by sponsoring the legislation while still owning shares in his family’s human resources company.
Dawson confirmed to CTV News the investigation is solely focused on Morneau’s sponsorship of Bill C-27.
Cullen wrote to the ethics commissioner in October requesting an investigation into whether Morneau was in a potential conflict of interest for putting forward the bill while -- as CTV News first reported -- still indirectly owning shares in Morneau Shepell.
Bill C-27 proposes changes to private pensions, something that would fall under the company's purview.
On Oct. 26 Dawson informed Cullen that she had "concerns" about his sponsorship of the bill and would be following up with him on it. Friday, she made it official she has grounds to dig deeper, and has informed Morneau.
"I received comments from Minister Morneau on his involvement in Bill C-27. I also received information from the Honourable Pierre Poilievre, Member of Parliament for Carleton, on November 8, 2017. In light of the information provided in your letter as well as information gathered by my Office, I am of the view that I have reasonable grounds to commence an examination under subsection 45(1), and have so informed Minister Morneau."
At the time Cullen requested an investigation, Morneau was using an ethics loophole to continue to indirectly own shares in Morneau Shepell. Morneau has since announced he is divesting himself, and will donate the money earned from any increase in the value of shares in Morneau Shepell since he was elected.
Morneau Shepell stocks have fluctuated over Morneau’s time as finance minister, but days after Bill C-27 was introduced, the value of the shares rose.
The minister’s office emphasized that Dawson was conducting an examination and not an investigation, though the ethics watchdog herself has confirmed there is no difference.
Section 45(1) of the Conflict of Interest Act states that if the Commissioner has reason to believe a public office holder has contravened the Act, she can “examine the matter on his or her own initiative,” and unless the examination is stopped, the Commissioner will provide the Prime Minister with a report laying out the facts, and the Commissioner’s conclusion to whether the public office holder broke the law.
"Just admitting to what is obvious to everybody would be a good start, for the finance minister, rather than trying to play semantics," Cullen told Omar Sachedina on CTV’s Power Play.
“He’s in a world of trouble… I’m not sure what he does. I’m sure Mr. Morneau and Mr. Trudeau will be talking this weekend,” Cullen said.
Poilievre, who is Conservative finance critic, had also asked Dawson to investigate Morneau for potentially violating the Conflict of Interest Act. He told CTV News it is Dawson’s job now to get to the bottom of things and find out how much involvement Morneau had in the formation of the pension bill, while indirectly holding Morneau Shepell shares.
“We need to have absolute confidence in our finance minister… We need to know that he’s always acting in the public interest, not his private interest, that he never should profit from public decisions he makes with the awesome powers he has as finance minister. Hopefully the ethics commissioner will tell us whether or not he did,” Poilievre said.
Dawson was likely provoked by Morneau insisting that despite her concerns, he insists that he wasn’t in a conflict, said Andrew Stark, a professor of strategic management at the University of Toronto.
“From everything we know in the public domain, yes, the minster was in a conflict of interest. The law says public office holders should not in be position where he has the opportunity to advance a personal interest. Whether or not it was actually materially advanced is a side question, but that’s not definitive of a conflict of interest,” Stark said.
Bill C-27 was tabled in Oct. 2016, and has not yet been debated. The opposition have called for the Liberals to remove the bill from the notice paper and to close the loophole in the ethics law that allowed Morneau to continue to indirectly hold shares while finance minister. So far the government has opted against doing either.
When he took the finance minister position, Dawson set up an ethics screen managed by Morneau’s chief of staff to keep the minister from getting involved in government business that could affect the company, but his continued ownership of the giant HR firm created the potential for Morneau to have violated the Conflict of Interest Act, the opposition has said.
In a statement to CTV News, a spokesperson for Morneau said he will "answer any questions the Commissioner has on this matter."
"Since the first day in Office, the Minister of Finance has worked with the Conflict of Interests and Ethics Commissioner [sic.] and followed her recommendations and advice," said Chloe Luciani-Girouard, press secretary for Morneau.
In an interview on CTV’s Question Period that aired Oct. 29, Morneau said he didn’t see his sponsorship of Bill C-27 as a conflict “at all.”
In a statement issued in October, Morneau Shepell said it was not involved in the consultation on Bill C-27, and despite the company supporting the proposed changes, the legislation “is not expected to have a material impact on our company.”