Morneau participated in Bombardier loan decision

Conflict-of-interest screen kept ethical breaches from occurring, minister insists

OTTAWA— Finance Minister Bill Morneau says he “of course” participated in government discussions around the decision to give Bombardier’s C Series and Global 7000 aircraft programs a $372.5-million repayable loan last winter.

Morneau dismissed as absurd comments made to the Star by Opposition critics that he should have recused himself from those discussions since he continued to hold shares in Morneau Shepell, which has the contract to run some, but not all, of Bombardier’s pension regimes.

Morneau Shepell, the company the finance minister used to run, is one of Canada’s largest administrators of pension and benefits plans, a point underlined by Morneau.

In brief comments to the Star in a lockup for reporters on his fall economic update, Morneau said that when he stepped down as executive chairman of the company after he was elected in November 2015, Morneau Shepell had 20,000 clients across Canada.

He suggested he didn’t know all of the corporate clients and a communications adviser standing with him added that in any event the conflictof-interest screen that Ethics Commissioner Mary Dawson had urged upon him was in place.

That screen, Morneau’s office said on Monday, “protects against conflicts arising from dealings specifically with or related to Morneau Shepell, and each instance is reported directly to the Ethics commissioner.”

Asource told the Star that Bombardier’s contract with Morneau Shepell to administer benefits for some of its workers has been in place for more than a decade and there has been no substantial change since the 2015 election. Neither Morneau Shepell nor Bombardier would discuss their contract.

Morneau says he remembered “at least two times” being taken out of meetings and was unaware of any requirement to report the recusals. Dawson’s office confirmed to the Star Tuesday that Morneau’s office has reported no recusals to it.

Dawson only publishes “recusals” or instances when the screen fails to work in advance to prevent the minister’s participation in a discussion in which he could have a conflict of interest — and he has to step out of, or recuse, from the discussion.

Conservative finance critic Pierre Poilievre said in an interview Tuesday that Morneau “exposed himself to a long list of real or perceived conflicts of interest” in hanging onto his $20 million in Morneau Shepell shares and the Bombardier loan raises concerns in his view.

“When a finance minister forks over $372 million to a corporation like Bombardier, Canadians deserve to know he’s doing it in their interests, not because of some other unknown reason.” “The Bombardier bailout has turned into an absolute disaster,” Poilievre said. “Since it was announced, the executives have given themselves pay increases and they’re laying off 14,000 people. Now, we learn that their most cherished plane is being sold off to European investors.” (Airbus is taking a controlling interest in Bombardier’s C Series program, with no money or debt exchanging hands.)

"It’s very hard to see how all of this handout to Bombardier was in the public interest. So whose interests were involved in this terrible decision?”

NDP ethics critic Nathan Cullen echoed similar concerns. “I’m not sure what’s worse: the transgression or refusing to admit there was a problem in the first place.”

“When it appears to be a conflict to everybody else except the person involved, you know you have a problem with the person involved and with the so-called ethical screen you could drive a truck through. He receives benefit from the decisions he’s making. He’s involved in conversations that he should not be involved in,” said Cullen, adding Morneau refuses to answer whether he was recused on C27 (a pension reform bill).

Last week, Morneau announced he would place his all his assets in a blind trust and move to sell about one million Morneau-Shepell shares — worth about $20.6 million and held by an Alberta numbered corporation — in an arm’s length transaction under the guidance of Dawson. He meets with her Wednesday to discuss his next steps in that process, he told CBC.

“The Bombardier bailout has turned into an absolute disaster.” PIERRE POILIEVRE CONSERVATIVE FINANCE CRITIC