Morneau says he didn’t relay any tax secrets
Tory uproar in Commons after finance minister’s father sold shares before tax change
OTTAWA— Finance Minister Bill Morneau insists he didn’t spill secrets about a government tax announcement after revelations Thursday that his father had sold more than $3 million worth of shares in the family firm ahead of the changes.
The news sparked a raucous showdown in question period that saw a Conservative MP booted from the chamber and the finance minister fending off renewed attacks from his Opposition critics.
Insider trader reports show that William Morneau Sr. sold 100,000 shares in Morneau Sheppell on Nov. 23, 2015, and another 100,000 shares on Dec. 3, 2015, for $3.02 million in total.
The elder Morneau is honorary chair of the human resources firm he founded and was subsequently headed by his son, Bill, until his election win in 2015.
The revelation about his father’s stock sale comes on top of Opposition suggestions that Morneau personally profited by selling 680,000 of the two million Morneau Shepell shares he held just before Dec. 7, 2015, when he introduced an increase to high-income earners’ taxes that would kick in Jan. 1, 2016.
The 680,000 shares were sold for $15 apiece, for a total of $10.2 million. By Dec. 14, a week after the tax rate announcement, they had dropped to $13.96 per share.
“Is it just a coincidence that both he and his father sold millions of dollars worth of shares a week before he introduced tax increases that helped drop their value?” Conservative MP Pierre Poilievre said in the Commons.
“Did anyone have knowledge of this tax change and its timing prior to it being made public?” NDP MP Nathan Cullen said.
At first, Prime Minister Justin Trudeau deflected questions, then Morneau voiced “disgust” with “slanderous” suggestions about his family.
He told a Conservative MP to “grow some spine” and state his accusation plainly, inside and outside Parliament, where his critics would have no immunity from libel laws.
But after weeks of dodging direct answers, Morneau finally confront- ed his critics’ suggestions head on, conceding for the first time that he may have been behind the Nov. 30 sale of 680,000 shares in Morneau Sheppell.
Morneau admitted he directed the sale of the shares when he first came into office.
Speaker Geoff Regan struggled to keep order after Morneau suggested his critics didn’t understand how stock markets work. Regan scolded Morneau and when Conservatives and New Democrats continued to heckle across the aisle, the Speaker singled out one MP, Conservative Blake Richards, warning him to stop shouting or be removed.
A moment later, Regan cracked the whip, using a rarely used power — called “naming” — to evict an MP from the House to preserve decorum, in which he dropped the nicety of referring to the MP by riding: “I ask the Sergeant-at-Arms to remove Mr. Richards.”
It is only the 44th time in more than 100 years that an MP has been ordered out of the House and it set off an uproar among Conservatives who continued to pepper Morneau with questions.
In the Commons, and in a later scrum with reporters, Morneau said he did not personally sell off the shares on Nov. 30, but had given direction to his financial adviser “around the time I came into office” to do so. He couldn’t remember the exact date he gave that instruction, nor did he know “on what exact date those shares were sold. It might have been on the day suggested. It might have been on another day,” he said in the Commons.
He said he had no idea why his father sold his shares when he did.
“I have no way of knowing what my father does or doesn’t do with his personal affairs,” he told reporters.
“My father is pretty good at reading, so he would have read newspapers like 36 million Canadians” and known the Liberals were going to raise his taxes “and we did,” Morneau said.
“My father knew about our campaign platform . . . We talked about the campaign that I wanted to move forward on and that included raising taxes on the top 1 per cent. Of course it was a subject of discussion,” the finance minister said.
But he insisted no details of the announcement or its timing were shared beyond a small “closed circle” of Department of Finance officials and other officials who “needed to know within our government” about “our actions in advance of that date.”
“I did not at any point in time, nor would I at any point in time, discuss any confidential information with my father or with anyone else who wasn’t in that closed circle,” he said.
Morneau said he decided to sell shares when he came into office and before he began working with the ethics commissioner Mary Dawson to arrange his affairs.