Morneau on defence as attacks continue
OTTAWA • Finance Minister Bill Morneau had yet another rough day in Parliament Monday as he continued to draw opposition fire for not placing his assets in a blind trust for two years following his election.
Conservative MPs spent most of the day’s question period in the House of Commons attacking Morneau over the new allegation that he sold $10 million worth of Morneau Shepell shares two years ago, shortly before making a tax policy announcement that caused the stock market to fall, decreasing the value of those shares by half a million dollars.
Morneau’s office called the attack “absurd” and “utterly false,” and challenged the Conservatives to make the allegation outside the House of Commons, where parliamentary privilege doesn’t shield MPs from libel lawsuits. However, the NDP have already said they’ll be asking the ethics commissioner to investigate.
Conservative finance critic Pierre Poilievre used question period to raise a story the National Post published in October which reported that Morneau had sold 680,000 shares in Morneau Shepell, the human resources services company where he had been executive chair, soon after taking office on Nov. 4, 2015.
Poilievre pointed out that trading records show someone had made such a sale a week before Morneau tabled a motion in the House of Commons on Dec. 7, 2015 which, among numerous other changes, unveiled a new 33 per cent tax rate on income above $200,000.
Although those changes had been outlined in the Liberal election platform, Poilievre said the timing of their implementation wasn’t clear until Dec. 7, when Morneau announced they would kick in on Jan. 1, 2016. He also claimed the news caused a dip in the market as stocks were sold before the new rules took effect.
“Investors quickly sold their shares in the 2015 year so that they could realize their gains in a lower-taxed year,” Poilievre said. “The markets dropped. Morneau Shepell dropped by five per cent, but not before someone who knew what was going on was able to sell his shares and save a half a million.”
Poilievre and other Conservative MPs repeatedly asked Morneau to confirm when he sold his shares, but Morneau declined to answer, instead accusing the Conservatives of “trying to create conspiracy theories out of thin air.”
Documents Morneau’s office showed to the Post a month ago didn’t specify the exact date of the sale, but did show the 680,000 shares had been sold before Dec. 7 at a share price of $15, for proceeds of $10,183,000.
They also showed Morneau sold a further 320,000 Morneau Shepell shares on Dec. 17, at a price of $14.26. The proceeds of $4,487,088 were donated to the Toronto Foundation, a registered charity.
It’s unclear how much the Dec. 7 announcement specifically affected the stock market, which had seen significant fluctuation around that time but was generally in a period of decline. The Morneau Shepell share price closed at $14.70 on Dec. 7, and dropped to $13.96 by Dec. 14. By March 2016 it had climbed over $16, and today shares trade for more than $21.50.
The new allegation follows weeks of controversy over Morneau’s personal financial affairs. In late October, he pledged to sell off his remaining Morneau Shepell shares (worth just over $20 million), and to place all his assets into a blind trust.
But the opposition has continued to hammer him, particularly over the fact he introduced Bill C-27 in 2016, which makes changes to pension regulations for which Morneau Shepell had previously advocated (the bill hasn’t moved past first reading).
Mary Dawson, the conflict of interest and ethics commissioner, has opened a formal examination into whether Morneau’s introduction of the bill put him into a conflict of interest.
The NDP’s Nathan Cullen now says he’ll be writing to Dawson about the 2015 share sale, and will call on her to open a second investigation if it turns out she didn’t know about the share sale before it happened.
Cullen told reporters Morneau was “evasive” when asked about it during question period, and said he should simply be open about his holdings.
“This is just basic information,” he said. “I don’t understand why this is so hard for Mr. Morneau. He was been given many opportunities today to clear the air over this. He chose not to.”