Morneau says he will put his assets in a blind trust
Published Thursday, October 19, 2017 10:28AM EDT
Last Updated Thursday, October 19, 2017 10:04PM EDT
Finance Minister Bill Morneau says he will put his personal assets in a blind trust and divest himself of his family business shares, amid conflict of interest allegations.
Morneau has insisted that he followed all the rules and the recommendations of the federal ethics commissioner when he came into office. He said he believes that doing so has helped him avoid conflicts of interest, but amid growing controversy over his assets, he realized that he needs to “do more.”
“I perhaps naively thought that following the rules and respecting the recommendations of the ethics commissioner, respecting the recommendations of an officer of Parliament, would be what Canadians would expect," Morneau told reporters in Ottawa on Thursday.
He said he has informed Conflict of Interest and Ethics Commissioner Mary Dawson of his intention to put his assets in a blind trust and spoken to a lawyer to start the process. He said he will eventually sell off all of his and his family's shares in Morneau Shepell, a human resources firm.
As CTV News reported Tuesday, Morneau continued to own shares in Morneau Shepell through a corporate structure that has kept him from having to divest or put his shares in a blind trust. He says this decision was made based on the advice of Dawson and because his money in Morneau Shepell stock was held by a numbered Alberta company.
This was in contrast with 10 current members of the federal cabinet who divested their holdings, including Prime Minister Justin Trudeau. But technically, they were not requirements that Morneau had to meet.
The opposition has alleged that Morneau's continued ownership of shares in the firm creates numerous conflicts of interest.
Morneau said Thursday that the controversy surrounding his finances has been a “real distraction” from the federal tax reform discussions this week.
Morneau’s staff handed out copies of the letter Dawson sent him in February, 2016, with recommendations on how to avoid conflicts of interest as finance minister. Her letter said that a blind trust was not required for his assets, but that a “conflict of interest screen” was “the best measure of compliance” in Morneau’s case.
That conflict of interest screen, managed by Morneau’s chief of staff, was designed to keep the finance minister from getting involved in government business that could affect Morneau Shepell.
Morneau said Thursday that although he has followed Dawson’s recommendations, he now “wanted to go further” with a blind trust and divestments of his shares.
“This is a way for me to assure Canadians, to the highest level of confidence, that there is no possibility of any conflict of interest,” he said. “I already knew there were no conflicts of interest, but apparently what’s been in place, what we’ve been doing for generations…is now being questioned.”
Morneau said he currently has “about 1 million shares” and how they’re divested “will likely be out of my hands” as someone else handles the process for him.
“And I’m OK with that,” he said.
Morneau stepped down as Morneau Shepell’s executive chairman after the 2015 federal election. The worth of his shares is estimated to be $21 million at current stock prices.
As Dawson told CTV News Tuesday, her advice to Morneau about his shares was based on the fact they were held by the numbered company, so he was considered to hold them indirectly. The way she interprets the law only applies to directly held shares. It’s a loophole she flagged in a 2013 report, when the Conservatives were in power, but neither they, nor the current government, have done anything to close it.
In an interview with CTV’s Power Play on Thursday, Morneau said that having a conflict of interest screen means that he has either abstained from, or left certain meetings to avoid discussions that might affect his family’s company.
But the opposition has accused him of having an obvious conflict of interest when he sponsored Bill C-27,legislation that would allow companies to set up "target benefit" pension plans. The NDP said the bill would significantly benefit Morneau Shepell.
Morneau told Power Play host Don Martin that he doesn’t have “any way to interpret what in fact impacts the shares of a company that I’m actually not affiliated with anymore.”
After his announcement on Thursday, Morneau once again faced pointed questions from opposition MPs during question period in the House of Commons.
Conservative finance critic Pierre Poilievre accused Morneau of using the ethics loophole “in order to continue to earn millions of dollars” on his shares, while trying to disadvantage small business owners with his recent tax reform proposals.
In response to Poilievre and other MPs, Morneau reiterated that he is going “even further” than his predecessors in ensuring he has no conflicts of interest and will continue to work with the ethics commissioner.
With files from The Canadian Press