Information & Ethics Committee on Aug. 10th, 2020

[Matthew Green, NDP, Hamilton Centre, ON]

Or not even paid more; it's clear in your submissions that people who are coming in with blind trusts are essentially asking the public to blindly trust them that the decisions they make regarding their own personal wealth will somehow be managed in another way. Do you believe, in your opinion, the writing of a $40,000 cheque, that actual action, is in contravention of the anti-avoidance section, section 18, of the Conflict of Interest Act?

[Duff Conacher]

In that particular situation, it's possible that Minister Morneau thought he paid for that entire trip, for those two trips by his family, and that his family paid the entire amount, because they did pay $52,000. But I will not believe that claim until I see the entire communication record between WE Charity and every member of the family.

If WE Charity said at any time that part of that was complimentary, then Minister Morneau knew, and it raises questions not only of ethics violations because he accepted that gift.... But as you say, trying to pay it off just before testifying would, I think, violate that anti-avoidance clause, and it raises questions—as Democracy Watch has filed complaints with the RCMP—of breach of trust. Being in that kind of relationship, knowing what the ethics rules are, which Minister Morneau does because he has been found guilty of violating them and has been investigated for violating them, but still continuing to participate and direct his staff to participate in the process raises those questions.

[The Chair, Conservative, Rachael Thomas]

Mr. Conacher, that's time.

Thank you.

We will move to our five-minute round.

First up is Mr. Gourde.

[Jacques Gourde, Conservative, Lévis—Lotbinière, QC]

Thank you, Madam Chair.

Thank you for being with us today, Mr. Conacher.

As we speak, ethics in Canada has taken a serious beating—anything having to do with conflicts of interest, apparent or real, involving members of Parliament, ministers, even the Prime Minister. As Canadians, we are looking for the safeguards, but few, if any, exist.

I'm going to tell you a little story about ethics. Fifty years ago, in my small municipality, the fellow who owned the local store became mayor. He sold the municipality a wheelbarrow and lost his job as mayor over $3.25. That's what you call ethical. Here we are, today, and the government is awarding $40-million or $50-million contracts. We are talking about the appearance of a conflict of interest. The word “appearance” is paramount, because what we're witnessing is the sponsorship scandal, version 2.0.

If members of our government can trade in favours to benefit their families, either directly or indirectly, what does that say to you, a long-time and well-placed observer of ethics? Where is Canada heading, in the face of something like this?

[Duff Conacher]

Well, very unfortunately, it's not getting better. As I mentioned, I've been before this committee 15 times, and other committees, as well, on related issues, such as whistle-blower protection. The Harper Conservatives made some changes, but specifically, the Conflict of Interest Act eliminated the rule that required honesty and continued to allow this sham of so-called “blind trust”, which is not blind at all, because a person knows what they put in the trust, chooses the trustee and can even give instructions. Disclosure hasn't really increased that much, so in every way dishonest, unethical, secretive, unrepresented and wasteful decisions and actions are still legal, and therefore encouraged, especially because of the weak penalties. To put it another way, everything Karlheinz Schreiber did in relation to Brian Mulroney is still legal at the federal level in Canada. That's how bad it is.

I'm hoping for change soon. That's why I'm encouraging the committee to realize that the system is the scandal and to draft a bill and to introduce it in the House. Private members' bills have a much better chance of passing in a minority government.

Recruit your colleagues. Even if the party leaders resist and try to maintain this currently undemocratic, unethical and corrupt system, hopefully a critical mass of MPs will say, “No, we're going to finally clean things up, in part so we're not found guilty by association with the people who are there serving their own interests and the interests of those who have done favours for them, as opposed to being there to serve the public interest.”

[Jacques Gourde, Conservative, Lévis—Lotbinière, QC]

You really captured how Canadians perceive the government and the system. You called Canada's current system corrupt and unethical. It scares me to see the legacy that's being passed on right now. If those at the top are setting the example, Canadians just might cast ethics aside overall.

In a democracy, especially ours, ethics is a hallmark of morality. It's paramount. No matter what programs are introduced and no matter what support we want to give Canadians, if everyone can apply for assistance, whether they need it or not, or cheat a bit to get ahead, someone, somewhere, is going to have to pick up the tab in the end. It'll be a very hefty tab for all of Canadian society.

Do you think we can find a way out of this?

[Duff Conacher]

Well, we can. We can certainly change the rules first and increase the penalties and enforcement, and together those three things will hopefully change the culture and drum out those people through transparency, whether they be politicians, government officials, appointees, lobbyists or staffers, who are there in federal politics for the wrong reasons.

As Prime Minister Trudeau mentioned in the 2015 election platform, sunshine is the world's best disinfectant, so we need the transparency the Liberals promised. We need to close all the loopholes. As Jean Chrétien said back in 1993 in the Liberals' red book platform chapter on governing with integrity, if the government is to be a force for good in society, it must act with integrity. He was right. The trust levels right now, over the past five years, are generally at about 10%. Only 10% of voters trust politicians.

Thankfully, swing voters care about these issues and swing voters decide elections. Every party that has put forward a strong platform and put it as a highlight of their platform in the last 25 years, in every election across Canada, federal and provincial, a platform to clean up politics in multiple ways—

[The Chair, Conservative, Rachael Thomas]

Mr. Conacher, thank you.

[Duff Conacher]

—has won more seats or won the election. So swing voters care and it's a good thing that they continue to care.

[The Chair, Conservative, Rachael Thomas]

Thank you, Mr. Conacher.

I am moving on to Madame Brière and Ms. Zahid.

You have five minutes.

[Élisabeth Brière, Liberal, Sherbrooke, QC]

Thank you, Madam Chair.

Good afternoon, Mr. Conacher. Thank you for being here. Thank you as well for answering our questions, and sharing your thoughts and comments with us.

I want to thank the public service for everything it's doing right now to help us through this crisis. We heard from senior officials who said they didn't think they had the capacity to administer the Canada student service grant program. Let's set aside the decision to recommend WE Charity. Do you not have confidence in our public service, and its capacity to determine what it can, could or should do, especially during a crisis like this one? We're talking about a public service that has already pushed the limits, one that is already stretched thin. Public servants have implemented numerous programs during the crisis.

[Duff Conacher]

Well, first of all, the head of the largest public sector union testified that, no, the public service could have done it, and I would presume he would have connections and contacts with top-level people and be able to check on something like that before saying it.

Second, though, thousands of applications were already being processed by the Canada Service Corps and Canada summer jobs. It is easier to just expand that and continue processing those applications. We know now some of the details of what WE Charity was going through to try to start up and implement this program. Even if you are going to contract it out—I know there was a rush, but there are rules in the Financial Administration Act, whereby you can put out a contract for bidding for 10 days.

If you're in a rush and there is something that needs to get done really quickly—although I don't really think it had to get done as quickly as everyone is proposing—then that 10-day rule could have been used and some of the 20 groups that were supposedly reviewed but most of which were never even contacted would have, I'm sure, put in a proposal if they would have known that they would be getting $33 million to administer it. They might not have the internal capacity without the $33 million, just as WE Charity didn't, but if they knew $33 million was on the table, then I would bet you would have seen half a dozen applications at least from things like the Boys and Girls Club and the United Way and you would have had a competitive bidding process.

So there was no reason to break the rules. There's no reason to break the rules in this crisis in any way, including in terms of not having Parliament fully open to be reviewing government and holding government accountable. You just do things faster, but you don't have to completely throw out rules and compliance with the rules in this situation at all.

[Élisabeth Brière, Liberal, Sherbrooke, QC]

Do you have confidence in our public service?

[Duff Conacher]

Well, I can't answer such a general question. We're talking about hundreds of thousands of people, and I've seen lots of scandals. We don't have a whistle-blower protection system that protects others, the many people who want to report wrongdoing, so it's an assessment I can't do.

In this case, though, we know that Ms. Wernick had a relationship with WE Charity going back a few years. I think that relationship.... As I mentioned, the small gifts and the building of a relationship is what lobbyists do, and they do it for a reason. They do it because clinical psychologists have proven that it influences people's relationships and their decisions. I think that's part of what happened here. There was an easy alternative, which Ms. Wernick knew, and which cabinet knew very well, and they just got tunnel vision instead of following the rules.

The rules are there to protect people from having tunnel vision and advancing their own private interests, the private interests of their family's favourite charities, or those of a favourite organization they have worked with. The rules are there to protect the public's money, and that's why the rules need to be strengthened. Loopholes need to be closed, and enforcement and penalties need to be put in place, because there are no penalties right now for violating those spending rules, other than maybe seeing an Auditor General's report five years from now saying that you violated the rules. Why would anyone follow a rule when there's no penalty?

[Élisabeth Brière, Liberal, Sherbrooke, QC]

Thank you.

I'm sharing my time with my colleague.

[Salma Zahid, Liberal, Scarborough Centre, ON]

Thank you, Chair.

Thank you for appearing before the committee, Mr. Conacher.

My question is this: Where would you draw the line for the involvement of a family member in charitable or professional work? This could overlap with the decision-making of an MP in cabinet.

Do you have an opinion on where a line should be drawn for determining who is a family member? How far does the family go?

[The Chair, Conservative, Rachael Thomas]

You have 30 seconds.

[Duff Conacher]

Well, it should go where the Conflict of Interest Act goes now, which is not just to immediate family members, but also relatives. It was entirely appropriate for the Ethics Commissioner to find, for example, Minister LeBlanc guilty when one of the bids for a contract he approved came from a cousin.

You just have to be aware of these things. Every minister should have a list, and all of their staff should have it too, of what their interests are, who their family members are, and what businesses and other organizations they're involved in. They should be checking that list, and checking it twice, to make sure that they're not involved when they're not allowed to be.

[The Chair, Conservative, Rachael Thomas]

Thank you, Mr. Conacher.

Moving on to Mr. Kurek for five minutes, please.

[Damien Kurek, Conservative, Battle River—Crowfoot, AB]

Thank you very much, Mr. Conacher. I appreciate you coming to join us. I have certainly followed much of your work through my interest in politics over the last number of years, and I continue to now while having the honour to serve in Parliament.

I'm troubled by the decision-making process that led to this whole series of events: the conflict, whether it is perceived or real; the throwing of the public service under the bus; and the, at best, misrepresentations—there are certainly other words that could be used to describe the actions of the Prime Minister and others—in how they've answered questions related to this.

I'm curious as to your thoughts on the decision-making process that led to this and about your suggested changes that could be implemented to ensure that this sort of thing, first, gets exposed, so that we get all the facts, and, second, doesn't have to happen again. It's an abuse of taxpayers, an abuse of trust, and it truly damages the trust that Canadians need to have in their public institutions.

[Duff Conacher]

One thing they didn't mention was this notion of conflict of interest screens, which has been in the news with regard to the Prime Minister's chief of staff, again, over the weekend. These conflict of interest screens were created by ethics commissioner Mary Dawson. They're not authorized by the act. Democracy Watch challenged them in court. Unfortunately, the Federal Court of Appeal said they were a reasonable enforcement tool.

They really aren't. Anyone who has a screen who is a minister...then their staff, who serve at their pleasure, are supposed to enforce this screen and tell them what to do, and tell them not to go to meetings or take part in phone calls or whatever when they have a conflict. Then they learn what decision or meeting is going on, because they're told they can't go and why. Who's to stop them from intervening or telling their staff, “Thanks very much for your input, but you serve at my pleasure, and if you want to keep your job, you'll keep your mouth shut”?

What's required in the act is recusal. The recusal has to be declared publicly with the reasons for the recusal within 60 days. The screens should be banned. It would be a step forward, as it would be for the recusal system to go forward, as former ethics commissioner Bernard Shapiro recommended back in 2006 because he saw so many problems with using screens.

That's one key thing, but I think another one is that, as I mentioned, when you initiate a spending process, there should be a compliance check with the Auditor General right up front. The Auditor General would be able to flag a lot of things very early on. That wouldn't work for all decision-making processes, but strengthen the rules, close the loopholes, strengthen enforcement and penalties and everyone would have much more incentive to follow the rules, with a higher chance of getting caught and penalized than they have now. The current system is a scandal. It's really a sad joke. It's no surprise at all that there's scandalous behaviour as a result.

[Damien Kurek, Conservative, Battle River—Crowfoot, AB]

Thanks very much.

I'm wondering if you could outline just a couple of examples of what you feel appropriate penalties would be for violation of the Conflict of Interest Act once, twice and we're looking down the barrel of what could be a third time. I'm wondering if you have any comments on what those appropriate penalties could be.

[Duff Conacher]

A lot of people misunderstand the act. They say, "Wait a second, they didn't do anything to help anybody." No, the act is there to prevent you from doing that. If you do something to help someone, then you're in breach of trust. If they gave you any favour or benefit in order for you to do something, then that's the anti-bribery provision in the Criminal Code.

The act is there as a civil, non-criminal means to prevent these things from happening. The Supreme Court of Canada has ruled that it's essential; if it's not strictly and strongly enforced, then we don't have a democracy. It ranks just below the Criminal Code in terms of importance of maintaining government integrity. I think the penalties should be, as a result, very high. I believe one year's salary for a violation of these key rules that are there in the act should be the minimum penalty that the commissioner is required to impose. You are all supposed to be upholding the public trust. When you violate this act, you violate the public trust. The penalty should be very severe.

[Damien Kurek, Conservative, Battle River—Crowfoot, AB]

This will be my last question. The Prime Minister in the 2015 campaign talked a lot about sunny ways, transparency and all of these things. We saw a few virtue-signalling measures like public mandate letters and that sort of thing. Can you comment on any substantive changes that have taken place over the last number of years since the current government formed office in 2015, other than those very public attempts to make things look transparent?

[The Chair, Conservative, Rachael Thomas]

You have 20 seconds.