Be careful with trust
The ongoing controversy over Bill Morneau’s failure, once in office, to adequately separate himself from his personal wealth has exposed a gap in Canada’s conflict-of-interest law the Trudeau government must close if it hopes to preserve the vital public trust.
The Liberal government should put an end to the loophole that allowed the finance minister effectively to maintain control over a large stake in his former company even as he held the country’s purse strings.
The rule in question permits parliamentarians to continue to manage their personal investments as long as they do so “indirectly,” that is, through a holding company. The ethics commissioner has long recommended that this loophole be closed — and Morneau’s case makes perfectly clear why.
In the days since we learned the minister did not sell off his personal holdings or place them in a blind trust, as is established procedure, a number of possible conflicts of interest have been raised. Most serious among them is the possibility Morneau participated in internal discussions on Bill C-27, pension reform legislation that, if passed, would likely benefit Morneau Shepell, the human resources firm in which he maintains a stake.
In an effort to quiet the controversy — a “distraction,” the minister has called it — Morneau promised to sell off his holdings and donate the profits to charity. In the end, he will be less well off than if he had simply placed his assets in a blind trust, as a number of his cabinet colleagues, including the prime minister himself, rightly chose to do.
The minister’s charitable gesture is no doubt welcome, but questions remain about his conduct — and the ethics commissioner says she is looking into whether an investigation is warranted.
Whatever Morneau’s culpability, however, what is certain is that the law is inadequate. An NDP motion to change it was voted down in the House of Commons last week, likely in part because it also demanded that Morneau apologize for his alleged transgressions. The government can be forgiven for rejecting that bit of political gamesmanship, but it should not dismiss the important substance of the motion.
Clearly the architects of the country’s fiscal policy should not be allowed to maintain control, even indirectly, over large personal investments. As long as they are, the appearance of conflict is inevitable.
Ottawa cannot afford such appearances, especially at a moment of declining trust in government. Yet the Trudeau Liberals have been disturbingly slow to understand this. In their dismissive handling of the uproars over cash-for-access fundraisers, the prime minister’s holiday vacation on the Aga Khan’s private island and now the ethical morass of Morneau’s personal finances, the government has managed to revive old questions about Liberal entitlement.
That’s a problem not just for the Liberal party, but also for the country. Preserving the public trust depends not only on integrity, but also the appearance of integrity. Any failure to appear ethical gives ammunition to those who would use any pretext to attack government.
When Morneau spoke about middle-class fairness during his recent fiscal update, the opposition benches erupted in laughter. They’re not the only ones confused or disturbed by the answers on offer. One doesn’t need to impugn Morneau’s motives. When he dismisses questions about his finances as a “distraction,” when he says, as he recently did, that he “doesn’t answer to journalists,” he contributes to the sense that government is out of touch with the concerns of ordinary Canadians.
Amid eroding trust and great collective challenges, such impressions do real damage to the relationship between citizen and government. Instead, we ought to be closing conflict-of-interest loopholes, strengthening the law, ensuring the ethics commissioner has the mandate and resources necessary. What we can’t afford to do is trivialize what is clearly for Canadians a sign that government is not working for them.
The ethics commissioner has long recommended that this loophole be closed — and Morneau’s case makes perfectly clear why