Morneau in town to talk taxes, but faces fire over finances
WATERLOO — The focus for Finance Minister Bill Morneau’s visit to Waterloo Friday was supposed to be on small-business tax reform.
But Morneau found himself peppered with media questions about his personal finances as controversy continues to swirl around how the rookie minister handled his assets and investments when he entered public office in 2015.
“The process we have in our country isn’t that I report to journalists on my personal situation, it’s that I report to the ethics commissioner,” Morneau told one reporter during his visit to the Communitech Data Hub.
In a defensive that began in Ottawa on
Thursday and continued in Waterloo Friday, Morneau maintained that he disclosed all of his assets to the ethics commissioner in 2015 and “followed her advice to the letter” to avoid any potential conflicts of interest.
Morneau’s family business — pension management and human resources firm Morneau Shepell — is regulated by the finance ministry and could benefit from pension reform legislation that Morneau himself has introduced as finance minister. As Morneau’s shares in the firm were held indirectly through private companies, they didn’t meet the definition of a controlled asset under the Conflict of Interest Act; Morneau was told a blind trust wasn’t necessary.
Nonetheless, Morneau announced on Thursday that he would sell millions of dollars worth of Morneau Shepell shares, and place the rest of his assets in a blind trust in an effort to quell the controversy.
“What I’ve found is that there’s some noise around this,” he said Friday. “To deal with that, I’m going to go further than the ethics commissioner suggested … This is a way to make absolutely sure, over and beyond what was required of me, that there is no question that I’m working on behalf of Canadians.”
Ethics commissioner Mary Dawson actually recommended to the previous Conservative government that the loophole allowing indirectly held assets be closed.
Asked Friday whether his government would now take such action, Morneau remained noncommittal. “We want to, on an ongoing basis, make sure that our system enables us to live up to very high standards,” he said.
“I have not seen those comments from the ethics commissioner,” Morneau added. “They were to the previous government, not to me or us, but of course we will always take those sorts of ideas into consideration.”
Morneau’s Waterloo stop — the latest in a number of crossCanada visits he’s made this week to announce changes to the Liberals’ contentious smallbusiness tax plan — sought to reassure startups that they’d still be able to benefit from angel investors and venture capital.
“We want to make sure that there is capital available so that businesses can grow,” Morneau said. “We will maintain incentives for people to be angel investors, helping startup businesses to get going. We will maintain the opportunity for venture capital to play an important role in our economy, and we’re going to get that right.”
Members of Canada’s tech sector had raised concerns that changes to how passive income is treated could put the brakes on the sorts of investments that are the lifeblood for many fledgling firms.
“(Friday’s) announcement shows the finance minister and his department have heard the concerns of (Council of Canadian Innovators) members and are committed to ensuring this legislation aligns positively with the government’s innovation agenda and, in particular, the global growth of Canadian tech companies,” the council’s executive director, Benjamin Bergen, said.
The government announced this week that it will reduce the small-business tax rate from 10.5 per cent to 9 per cent by 2019. Under vocal pressure from a variety of groups, a number of proposed tax measures have also been tweaked or scrapped.
Morneau said Communitech president Iain Klugman told him he’d heard of “a little chatter” around the proposals. “That is the understatement of the week,” Morneau said. “It’s been a huge listening exercise.”
Waterloo MP and Small Business and Tourism Minister Bardish Chagger said those changes reflect what the government has heard during public consultations. “I can promise you that our doors will remain open,” she said.
“Our government is here to listen.”