Ethics watchdog set to look into potential conflict of interest involving Morneau
Conflict of Interest and Ethics Commissioner wrote NDP ethics critic to say she is looking into concerns he raised that Morneau held shares in a company which stood to profit from Bill C27.

TheStar.con
Oct. 26, 2017
Tonda Maccharles

Finance Minister Bill Morneau’s troubles deepened Thursday with word that Ethics Commissioner Mary Dawson intends to look into whether he was in a conflict of interest when he introduced a pension reform bill last year.

Morneau was also fined $200 by Dawson for belatedly disclosing he set up a French corporation that owns his villa in Provence, France.

After meeting the ethics commissioner earlier Thursday, the embattled minister announced he will donate to charity any profit on sale of his Morneau Shepell shares — a move that could total more than $5 million.

The minister now faces what could end up as a full-blown investigation.

Dawson, responding to a complaint filed by NDP MP Nathan Cullen asking her to investigate Morneau, said in a letter she also has concerns about the minister’s involvement with Bill C-27.

“While your October 16, 2017 letter does not identify the provision you allege to have been contravened, as required by the Conflict of Interest Act, your letter leaves me with concerns in relation to Mr. Morneau’s involvement with Bill C-27,” Dawson wrote to Cullen.

“Consequently, I will follow up with Mr. Morneau and will inform you of the outcome in due course.”

The pension reform bill that Morneau tabled in October 2016 has not been further debated. The NDP and Conservatives say that because Morneau continued to hold shares in Morneau Shepell — a pension giant that had advocated the same reforms that C-27 outlines and stood to profit from such changes — the finance minister was in a conflict of interest. Morneau adamantly denies the charge.

The minister met with Dawson in his office to discuss his vow last week to put all his assets into a blind trust and to sell his shares in the publicly traded company that he and his father built — despite her advice two years ago a blind trust was not required by law.

Dawson told Morneau of the $200 penalty for the late disclosure of his ownership of SCI Mas des Morneaus, a corporation that holds his and his wife’s French villa. Morneau had initially told her about the villa but not the existence of the ownership structure, until the CBC reported it last month. He was required by law to disclose all his assets within 60 days of election.

The fine is a small amount but a symbolic blow to Morneau’s claim to have strictly followed all the rules in his dealings with Dawson’s office.

Dawson also told Morneau she would have additional questions about C-27 but didn’t say he was under investigation; rather she is seeking “facts and additional information,” according to his office which said he pledged full co-operation.

But Morneau denies he was ever in any conflict in the past two years.

“Clearly the minister knew what was in the bill, he tabled it in the House; and there is no conflict because that is a bill that is of general application, that has a very broad application and is in the public interest . . . in the interest of retirement security for Canadians and it does not pertain specifically to any one company,” said Morneau’s spokesperson, Dan Lauzon.

Lauzon said the ethical “screen” recommended by Dawson “is working.” A February 2016 letter Dawson sent Morneau advises him that his chief of staff, Richard Maksymetz, must ensure the minister abstains “from any participation in any discussion and/or decision processes and any communication with government officials that would involve the interests of Morneau Shepell Inc. or its subsidiaries, affiliates and associates.”

Lauzon said that screen “has been applied a handful of times generally” to the minister and “in many cases, he would not be aware the screen was even put in place, but it is there, and it is protecting the minister, it is protecting the integrity of his office, and it’s being worked on with the department of finance through the chief of staff as recommended by the ethics commissioner . . . and to the extent that there would have been a conflict with respect to C-27 the screen would absolutely have come into place.”

Under withering opposition fire for two weeks, Morneau announced in the Commons he plans to donate to charity all profits earned on the one million Morneau Shepell shares he has held in a numbered corporation from the time he was elected in 2015 to when he finally sells them.

Conservative finance critic Pierre Poilievre scoffed: “Can he confirm now if he will donate the resulting tax savings that he will enjoy from the charitable tax credit to help pay off his deficit?”

“I think what we saw today was an admission of guilt,” said Cullen. “He still won’t say he’s sorry that he did anything wrong, but he’s now saying he’s going to pay a whole bunch of money . . . . I just don’t think turning over the profit guilt money over to charity is going to convince Canadians that this isn’t going to continue to happen again.”

Based on the rise in Morneau Shepell’s share value since Nov. 6, 2015 — two days after Morneau became finance minister — that’s about $5.4 million, an amount Morneau said Thursday he wasn’t focused on.

“Whatever the value is, that’s our decision. We’ve decided to make that donation. My goal is to make sure that, you know, I’m doing the work that I came here for. I obviously am really proud of the work I did in the private sector, but frankly, this work is more important than that. Moving forward is important,” he told reporters.

He told reporters he and his wife, Nancy McCain, have long been volunteers in community charitable work, most recently working to help refugee women go to university in Canada. He also said he would work with Dawson’s office to decide which charity would receive the money.

His office said Morneau made the charitable donation decision last week, at the same time as he planned to put all his assets in a blind trust and sell the Morneau Shepell shares. He didn’t announce it until after he could discuss it with Dawson Thursday, his office said.