The governing Liberals were ready with new line of defence on Monday as the controversy surrounding Finance Minister Bill Morneau continued to grow, expanding to the entire federal cabinet.
The government woke up to more trouble when The Globe and Mail reported that several cabinet ministers are using a loophole in the law governing conflict of interest on Parliament Hill to avoid divesting their financial assets or putting them in a blind trust.
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Federal Ethics Commissioner Mary Dawson‘s office has not confirmed who those ministers are (although it seems the prime minister is not among them), but did confirm the Globe‘s report to Global News late Monday afternoon.
“Fewer than five cabinet ministers currently hold controlled assets indirectly and … they are not required to divest them [by placing them in a blind trust or selling them in an arm’s length transaction],” wrote a spokesperson for Dawson’s office.
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But the commissioner also confirmed that the same was true of the cabinet under former prime minister Stephen Harper.
Dawson’s office, while not naming anyone or giving specific numbers, told Global News that “we can confirm that fewer than five cabinet ministers held controlled assets indirectly during the previous administration.”
On Monday afternoon, Prime Minister Justin Trudeau suggested during question period that a former Conservative finance minister, later identified as Joe Oliver, used the same so-called loophole in the Conflict of Interest Act to avoid divesting himself of assets over three years ago.
“It’s interesting to note that the Conflict of Interest and Ethics Commissioner has made recommendations to members of all parties and in previous governments,” Trudeau said.
“And the mechanisms that the finance minister currently has in place are very similar to the mechanisms that the previous Conservative finance minister had in place.”
Morneau’s parliamentary secretary, Quebec MP Joel Lightbound, later named Oliver specifically and said the Conservatives were suffering from “a bit of hypocrisy, a lot of amnesia.”
Oliver’s public disclosures, last updated in July 2015, confirmed he was, during his time in office, “sole owner of a private corporation which owns investment accounts.” When he first became finance minister in early 2014, Oliver was questioned about the arrangement, but would not release any details about investments he and his wife had made.
Oliver’s then-director of communications told a reporter with Postmedia News that neither Oliver or his wife owned “any public securities directly nor do they trade in public securities. Their securities investments are all in pooled funds (which are like mutual funds).”
It was revealed in recent weeks that Morneau legally used two corporations to hold about a million shares in his former firm, Morneau Shepell. The Opposition quickly raised questions about whether his decisions as finance minister could potentially benefit him personally.
Morneau has since promised to move the shares into a blind trust before selling them off, but has stopped short of acknowledging any wrongdoing.
Last week, Oliver — who is now back in the private sector as chairman of Echelon Wealth Partners — wrote an op-ed in the Toronto Sun in which he blasted Morneau for setting up a corporate structure to hold his shares in Morneau Shepell.
“In the spirit and intent of the Conflict of Interest Act, and as a matter of common sense, controlling assets through a holding company doesn’t eliminate a financial conflict,” Oliver wrote. “The proper approach was to dispose of his shares right away, rather than wait for two years to sell them under pressure.”
There have been repeated calls, including some from Ethics Commissioner Dawson herself, to close the corporate holding company loophole.
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