OTTAWA – Finance Minister Bill Morneau has been cleared by the Conflict of Interest and Ethics Commissioner over his sponsorship of pension legislation, Bill C-27.
The commissioner found that Morneau was not in a conflict, and therefore did not break federal ethics law over his sponsorship of the legislation.The controversy was sparked after it was reported that Morneau was using an ethics loophole to continue to indirectly hold shares in his family’s human resources company Morneau Shepell, though that is no longer the case.
Bill C-27 proposes changes to private pensions, something that would fall under the company's purview.
"Because Bill C-27 is of general application, Mr. Morneau's interests, those of his relatives, and those of Morneau Shepell Inc. in this matter are excluded from the application of the Act," Commissioner Mario Dion said in a news release announcing his decision.
"I found that he did not place himself in a conflict of interest in making decisions leading to the introduction of Bill C-27, therefore he did not contravene subsection 6(1) or section 21 of the Conflict of Interest Act," Dion said.
Speaking about being cleared, Morneau thanked Dion and his office for their diligence in investigating the matter, and pledged to always hold himself to the highest standard.
"Despite the questions that have been raised, my focus has always been on the people we were elected to serve," he said in a statement.
Morneau took political heat over this investigation for months in the fall of 2017, after NDP MP Nathan Cullen requested then-ethics czar Mary Dawson investigate Morneau’s alleged conflict.
She began formally investigating Morneau in November 2017 after receiving additional information from Conservative MP Pierre Poilievre, and speaking with Morneau.
After the probe was launched, Morneau announced he would be putting his personal assets in a blind trust and divesting himself of his family business shares. He also said he would donate the money earned from any increase in the value of shares in Morneau Shepell since he was elected.
After Dawson’s retirement in January, Dion picked up the case.
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.”
Morneau tabled the bill in Oct. 2016, and since then it has not moved, or been debated at all. 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.
'The Morneau Report'
In his formal report on the matter titled: "The Morneau Report," Dion said he didn’t think either request for an investigation met the criteria for "a valid examination."
Despite this, the investigation lasted months, and included an interview with Morneau, and the review of documents from Finance Canada, the Privy Council Office, and Morneau Shepell.
The investigation confirmed that prior to being elected in October 2015, Morneau indirectly held just over 2 million shares in Morneau Shepell, and shortly after the election he divested himself of one million, while still indirectly holding the other million shares in the company.
As well, Dion reports that several witnesses testified that it was the department and not Morneau who brought up the new pension policy, as it was work that was already underway under the previous Conservative government.
Concern with general application consideration
Critics are taking issue with the consideration within the act for policy changes that are considered to be of "general application," which Dion used in his finding in the Morneau Report.
The consideration of general application applies to federal decisions that have broad impact. In this case the commissioner argued that because Bill C-27 widely impacts federally regulated employees’ pensions and not just Morneau Shepell, that Morneau’s involvement in the bill is acceptable.
Cullen said because of this, the act "badly" needs to be reviewed, before the next election.
"The application of general application in this seems to be stretching the term somewhat, but it is a clear reading of the rules that we have in place. Those rules need to be updated," he said.
Democracy Watch spokesperson Duff Conacher echoed this call for narrowing the wording in the act. He told CTVNews.ca that as it stands, the majority of federal decisions are considered to have general impact, and that an update to the act is imperative to prevent future ministers from being able to make decisions that could unfairly benefit them, without consequence.
"It really should be called 'it's almost impossible to be in a conflict of interest act,'" Conacher said.
In a statement emailed to CTV News.ca, Poilievre said even though Morneau has been found to have not contravened the act, "his decision to introduce pension legislation while owning significant shares in a pension company demonstrated extremely poor judgment."
Speaking with reporters on his way in to the House of Commons Monday, Morneau would not comment on whether or not he thinks the act should change.
