Information & Ethics Committee on May 28th, 2021

[The Chair, Conservative, Chris Warkentin]

Madam Lattanzio is out of time, but we will allow you to answer the question, and then we will move on to the next questioner.

[Patricia Lattanzio, Liberal, Saint-Léonard—Saint-Michel, QC]

Thank you.

[Mario Dion]

Mr. Chair, I would like to, first of all, underscore the excellent services we received from the House of Commons in relation to IT services. We are really lucky because we belong to Parliament Hill, and we are receiving excellent services from this group.

We were able to modernize, incurring some additional expenditures but not of great significance, and it is well worth the investment, as was demonstrated during the pandemic. We are much more nimble than we would have been three or four years ago, without those improvements.

[The Chair, Conservative, Chris Warkentin]

Thank you.

We will turn to Madam Gaudreau now, for the next six minutes.

[Marie-Hélène Gaudreau, Bloc, Laurentides—Labelle, QC]

Thank you very much, Mr. Chair.

Commissioner, I am delighted, because your opening remarks and your responses to my colleagues' questions really did a good job answering the questions I had about your mandate and your budget. Thank you.

So I will take the opportunity to turn the rest of my time over to my colleague Mr. Fortin, who is going to ask you a few questions.

[The Chair, Conservative, Chris Warkentin]

Monsieur Fortin, you have the floor.

[Rhéal Fortin, Bloc, Rivière-du-Nord, QC]

Thank you, Mr. Chair.

Good afternoon, Commissioner. Thank you for being with us today.

Your mandate is certainly not easy, as investigating ethics issues must be quite stressful at times. You are doing very well, from what I can tell.

Mr. Dion, in your opinion, would the current Conflict of Interest Act be worth updating or amending to make it a little more effective?

[Mario Dion]

To answer the question as it was phrased, yes, I would say that the Act would merit some review. If the question had been asked differently, I would have said that, from my perspective as a Commissioner, the Act is working right now, although some things could be improved, obviously. If Parliament had time to spend either on a bill about this or on a parliamentary committee review, I believe that would be time well spent. When that happens, I will have several recommendations.

[Rhéal Fortin, Bloc, Rivière-du-Nord, QC]

Thank you.

Mr. Dion, at the end of the Trudeau III Report that you released, you point out that Mr. Trudeau acknowledged that he had an apparent conflict of interest. You told us that the appearance of conflict of interest was not covered in the Act. To my knowledge, it is covered in many other conflict of interest statutes or regulations, but clearly it is not covered in this case.

In your view, would it not be appropriate to amend the current Act to include the appearance of conflict of interest and, therefore, require people to recuse themselves from decision-making whenever they are in an apparent conflict of interest situation?

[Mario Dion]

I think we mentioned it in the report, but I would like to reiterate that in 2006, the government of the day made a conscious choice not to include the mere appearance of conflict per se in the Conflict of Interest Act. It's reflected in the parliamentary debates on the subject. The Senate had proposed an amendment to incorporate the issue of apparent conflict of interest, but they chose not to include it in the Act.

Would it be beneficial to do so? I haven't studied the issue thoroughly. I did study it a little, though, because I obviously expected these types of questions. This amendment would carry some danger, because you also have to guard against paralysis. We know that politicians and policy makers often know hundreds and thousands of people. Also, appearance is something very subjective. What I consider a conflict of interest will not necessarily be considered as such by my neighbour. Appearance is a bit intangible and abstract.

So that is the kind of thing that would need to be properly studied in parliamentary committee before concluding whether or not it is desirable to include it in the Act. It would also have to be determined whether, in practice, it is possible to sanction someone who, in a situation of apparent conflict of interest, nevertheless participates in decision-making.

[Rhéal Fortin, Bloc, Rivière-du-Nord, QC]

We already have provisions on the appearance of conflict of interest, in the Act respecting the Barreau du Québec, among others. In addition, when they have an apparent conflict of interest, court judges recuse themselves and do not sit. This seems to be quite common among those who have decisions to make. They don't leave themselves open by putting themselves in certain situations. It is said that if someone is in a situation of apparent conflict of interest, they undermine the appearance of justice, and the public may lose confidence in the judicial system. It seems to me that the same reasoning could be applied to situations involving government.

However, in this case, Mr. Dion, the appearance is quite significant. Members of Mr. Trudeau's family, including his mother, wife, and brother, received about half a million dollars, or at least several hundred thousand dollars, in contracts. Furthermore, Mr. Morneau's daughters worked for WE Charity. These individuals continued sitting even though they knew they were in a conflict of interest. Mr. Trudeau even postponed the decision to a later session because he was not comfortable sitting at that time. The contract was awarded under those conditions, without a competitive bidding process.

Ethics experts who testified before this committee told us that when you operate without a competitive bidding process because of the urgency of the situation, you have to be extra vigilant about anything that could give rise to conflicts of interest. In this case, not only was there no extra vigilance, there was less vigilance. No due diligence, accounting or forensic audits were done beforehand. It was even proven that the WE Charity people had negotiated directly with the government when they were not even registered as lobbyists.

So the contract was awarded to WE Charity, an empty shell with no financial history or assets to secure its obligations. No guarantees, bonds, mortgages or anything else were offered to the government. Yet the government gave WE Charity a contract for $500 million, perhaps as much as $800 million, without any auditing or bidding, simply because the Kielburger brothers were known to the Trudeau family. The Trudeau family had a relationship with them for about 20 years. I believe in Mr. Trudeau's case it dated back when the organization was founded in the 2000s.

I don't mean to suggest that you have done a bad job. I know that you are working within the provisions of the Act as it currently stands. However, shouldn't the extent of this apparent conflict of interest lead us to believe we need to anticipate such situations? Apparent conflicts of interest of this magnitude must be covered, so that situations of this kind can be avoided. Otherwise, it will be difficult to maintain public confidence in the current government.

What are your thoughts, Mr. Dion?

[Mario Dion]

I spoke earlier about the need to develop a reflex when one holds public office or is a member of Parliament. In addition, the Conflict of Interest Code for Members of the House of Commons deals with the appearance of conflict of interest and provides that it can be sanctioned.

Other than British Columbia, no other jurisdictions are doing it. We did a cursory check, and it's the only province where the appearance of conflict of interest can, in and of itself, be subject to sanctions, under the provincial conflict of interest legislation.

This needs to be looked into. The question bears asking. It was asked in 2006 and a choice was made. One day, we will have an opportunity to take part in a debate on the issue.

[The Chair, Conservative, Chris Warkentin]

Thank you.

We'll turn to Mr. Angus now for the next six minutes.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Thank you so much, Mr. Dion. It's always a pleasure to have you come to our committee. You don't come often enough, I think.

I want to congratulate you. I think your reports are always extremely diligent. I don't always agree with them, but I find them very fascinating and I reflect on them.

I want to ask you about the Morneau report because to me it really shows a staggering level of insider access. It answered many of the questions we were trying to figure out at our committee.

In sworn testimony to the committee, the Kielburger brothers stated that one of the reasons they opted not to register to lobby was because it was unusual for them to be spending any significant time with the federal government. However, in your report you state that Mr. Morneau's office:

...had an unusually high degree of involvement in...files relating to WE.... There were frequent communications between members of Mr. Morneau's ministerial staff and WE representatives.

...Mr. Morneau gave WE preferential treatment by permitting his ministerial staff to disproportionately assist it when it sought federal funding. I believe this unfettered access to the Office of the Minister of Finance was based on the identity of WE's representative, Mr. Craig Kielburger.

Would you say that this—to me, unprecedented—access to the finance minister's office created the conflict of interest for Mr. Morneau and certainly helped exacerbate the the WE scandal?

[Mario Dion]

In my view, they were friends within the meaning of the act. That's why we found Mr. Morneau to be in contravention of a couple of sections of the act, because Craig Kielburger and Mr. Morneau were friends, in my view.

The word “friend” is not defined in the act. It's up to me in each and every situation, on a case-by-case basis, to analyze the indicia of the relationship. In that instance, it was the determination I made after some reflection, but it was relatively easy to determine that they were friends.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Right.

I guess to me it's beyond the question of their being personal friends and going to brunch together. I find it shocking that their relationship, the way they treated staff in the finance minister's office, to say “Hey, girl”.... It's the sense that they were that welcome in there to say “Hey, girl” to federal staff.

When parliamentary secretary Jennifer O'Connell asked why she was being asked to attend a meeting with Craig Kielburger, she was told, “this one is important to Bill and Craig is not in town often. It is purely listening mode to keep him happy.”

Who were they trying to keep happy—Craig Kielburger or Bill Morneau?

[Mario Dion]

I don't know. We can each read this and make our own determination. It was one of the documents that we reviewed.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Okay. I find that—

[Mario Dion]

My interpretation of “to keep him happy” is as good as yours. Whether they're talking about Craig Kielburger or Bill Morneau, I don't know.

[Charlie Angus, NDP, Timmins—James Bay, ON]

It's highly unusual for the finance minister's office in a G7 country to say that they want to keep Craig Kielburger happy, if that's the case.

[Mario Dion]

That's what I thought. That's why I determined them to be friends—highly unusual.

[Charlie Angus, NDP, Timmins—James Bay, ON]

I'm really pleased you put that in there, because it stands out that something wasn't right there.

The Kielburgers stated the following under oath at the finance committee:

Any allegation and false claim that we would have financially benefited as individuals...is simply...false....[It is] incredibly insulting that [the committee] will not accept our answer on this.

You write:

There is no doubt that Mr. Kielburger's interests would have been furthered had WE administered the CSSG. WE...would have acquired a significant financial interest....[The Kielburgers'] involvement...is so prevalent that the organization's interests are also those of its co-founders.

You have stated on a number of occasions in your report that Mr. Morneau was inappropriately furthering the private interests of Craig Kielburger. Can you explain that?

[Mario Dion]

We weigh every word that we put in those reports very carefully. You have read some excerpts, and I recall that they're pretty powerful excerpts. We did weigh them very carefully before writing them. We have the evidence to support that. Receiving $43 million to manage a program of course will unavoidably improve one's situation vis-à-vis the ability to retain staff, for example, or the ability to borrow money and so on and so forth. That's why we came to that conclusion.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Again, many things seemed to just jump right off the page. One of the things that I found most shocking was this allegation that ministerial resources, the resources of a finance minister of a G7 country, were used to hustle gigs for the Kielburgers. You say:

...evidence...shows that Mr. Morneau and his...staff assisted WE by reviewing its funding proposals, introducing WE representatives to ministerial staff in...relevant departments as well as intervening on their behalf at...federal, provincial and municipal levels.

I mean, if the finance minister of a country is calling down into some town council to get a gig for Craig Kielburger, would you not agree that this is highly inappropriate behaviour?

[Mario Dion]

Of course I agree, because that was our finding. It was highly unusual. It was also inappropriate, in my view.