Evidence of meeting #18 for Access to Information, Privacy and Ethics in the 45th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was carney.
A video is available from Parliament.
Chief Operating Officer, Brookfield Corporation
I think the mechanism in place makes a lot of sense. I don't have any additional recommendations.
Conservative
The Chair Conservative John Brassard
Thank you, Mr. Beber.
Mr. Thériault, you have the floor for six minutes.
Bloc
Luc Thériault Bloc Montcalm, QC
Thank you, Mr. Chair.
In an article published on March 29, investigative journalists Jean‑François Cloutier and Anne Caroline Desplanques mentioned that Brookfield Asset Management—where Mr. Carney was president until January—had not paid a penny in taxes in three years, according to its financial statements.
The journalists relied on figures that Brigitte Alepin, a tax expert at the Université du Québec en Outaouais, obtained from documents filed with the U.S. Securities and Exchange Commission. They show that that when Mr. Carney was at the helm, Brookfield Asset Management paid zero taxes between 2022 and 2024, while reporting a billion dollars in profits.
According to the article, and I quote:
Tax expert Brigitte Alepin…says that taxes are paid elsewhere at Brookfield, but the complex structure of the business, with entities in various countries, makes their analysis almost impossible for an outsider. She feels that Carney owes the public an explanation, especially since Brookfield appears to have a strong presence in tax havens such as Bermuda, Barbados and the Cayman Islands. No fewer than 14 companies linked to Brookfield are named in the Pandora Papers of the International Consortium of Investigative Journalists.
Are those people wrong?
How do you explain that? We're talking about the U.S. Securities and Exchange Commission, after all.
Chief Operating Officer, Brookfield Corporation
I don't have the report you're referring to. There are many reasons that there may be misunderstandings relating to the types of disclosure you're referring to. In fact, many publications—not many, but some—have completely misconstrued the reporting we have done.
One of the main misunderstandings of those who perhaps are not as well informed in terms of how the tax rules work is that we aggregate, under international financial reporting standards, all income from across every business that we own and control. We aggregate all of that income, yet when we report our taxes, we report only the taxes that are proportionate to us. Therefore, there is a significant amount of tax being paid by our partners, others who own investments in these very same businesses, that doesn't get reflected in our statements. That tends to be a big misunderstanding as to our own reporting.
As I tried to explain, our businesses pay significant tax in all the jurisdictions in which they operate. We may not be picking up in our own reporting every single dollar of tax that's paid, because we don't own those businesses entirely.
Chief Operating Officer, Brookfield Corporation
I told you that in Canada alone, we paid $750 million in tax in 2024, one year.
Bloc
Luc Thériault Bloc Montcalm, QC
Could you provide us with a written response to the question I just asked you regarding the tax paid by Brookfield from 2022 to 2024 and the statement filed with the U.S. Securities and Exchange Commission?
Chief Operating Officer, Brookfield Corporation
I'll have to take that under advisement.
Bloc
Luc Thériault Bloc Montcalm, QC
Section 20 of the Conflict of Interest Act defines “controlled assets”, for the purposes of the act, as “assets whose value could be directly or indirectly affected by government decisions or policy”. It goes on to list assets that fall into that category, including publicly traded securities of corporations, foreign government securities and stock options.
Mr. Carney therefore has a direct financial interest in Brookfield that puts him in a conflict of interest or, at the very least, an apparent conflict of interest, insofar as the stock options he holds in Brookfield Corporation and Brookfield Asset Management are deferred. A number of newspapers, including the National Post, estimated the value of these deferred stock options at $6.8 million in December 2024, and we learned that they will expire in 2033-34.
If Brookfield is making money, Mr. Carney doesn't know how much that adds to the value of the assets he has in his blind trust, but he knows full well that his wealth is increasing. In fact, he did not divest himself of it, because by 2033-34, he will probably no longer be prime minister and his wealth will have increased considerably—partly because of the political and economic direction in which he is currently taking Canada.
Conservative
The Chair Conservative John Brassard
Thank you, Mr. Thériault.
We will now move on to the second round of questions.
Mr. Gourde, you have the floor for five minutes.
Conservative
Jacques Gourde Conservative Lévis—Lotbinière, QC
Thank you, Mr. Chair.
Mr. Beber, where does the Prime Minister's vision come from, after spending five years at Brookfield?
Is it possible that his work in this organization whose goals are economic—let's face it—has shaped his thinking for the future, even in his role as prime minister?
Chief Operating Officer, Brookfield Corporation
Mr. Carney came to Brookfield after a career at Goldman Sachs, after having been appointed Governor of the Bank of Canada by Prime Minister Harper, and Governor of the Bank of England by Prime Minister Cameron. I think when he—
Conservative
Jacques Gourde Conservative Lévis—Lotbinière, QC
I'm going to stop you there, because we all know the story.
There is a very strange ethical situation here.
Are there many vice-presidents at your company who became prime ministers practically the day after they resigned?
Conservative
Jacques Gourde Conservative Lévis—Lotbinière, QC
Usually, when a prime minister leaves political life, that kind of job may be offered to him for his next career. Here, the opposite is true. Mr. Carney had a thriving career in business and investment funds, and he decided to leave a very lucrative job to become Prime Minister of Canada. It pays well. He makes about $420,000 a year, but he must have made a lot more at Brookfield.
That being said, he holds deferred stock options. The Conflict of Interest Act seems unclear in this regard, because this is an unprecedented situation. We are talking about a prime minister who stands to receive a fortune, millions of dollars, from an investment fund following his tenure as prime minister.
We don't know if that will last two, five, seven or 10 years, but we do know that he has the opportunity to influence investments and create public-private partnerships with companies funded by Brookfield, which will indirectly increase its share capital in the future.
Doesn't this situation make you uncomfortable, given that Brookfield is a highly respected firm worldwide?
You risk creating something that you won't be very proud of, ethically speaking.
Chief Operating Officer, Brookfield Corporation
I don't think it's appropriate for a private enterprise to opine to government as to how the government should be regulating this matter.
What I can tell you is that we at Brookfield are very comfortable that the rules that apply to us, which cover lobbying and our interactions with government and public office holders, are clear, and we are highly capable of ensuring that we comply with them.
Conservative
Jacques Gourde Conservative Lévis—Lotbinière, QC
It's unheard of, because there are no rules. You could follow the rules, but there are none. This is the first time we've seen a sitting prime minister who holds equity in investment funds, which could be subsidized by government initiatives.
It's not your fault, Mr. Beber. The situation is truly unprecedented. I don't think we've ever seen this anywhere in the world, and it's happening here in Canada. Our Prime Minister can influence Canadian policy, he can help these funds, and he can doubtless negotiate with indigenous communities. There will be regulations under which Canadians will pay to help companies extract perhaps minerals, oil, a whole host of things.
Canadians are the ones who will foot the bill, and Brookfield and the companies it funds will reap the benefits. Canada's deficit equals the profits of the companies in Brookfield. This is unheard of.
Are you still comfortable with that possibility?
Conservative
The Chair Conservative John Brassard
I need a very quick response. It always seems to get to you with a very quick response, Mr. Beber, but I need a quick one.
Chief Operating Officer, Brookfield Corporation
We're able to comply with the laws that apply to Brookfield. We do that every single day, and we expect all of our companies to do the same.
Conservative
Liberal
Leslie Church Liberal Toronto—St. Paul's, ON
Thank you, Mr. Beber. You've been a very patient participant in this late-season fishing expedition.
I want to give you an opportunity to answer a question about how Brookfield is managing its interactions with the Prime Minister and with government. You touched on this earlier, but maybe you could expand a little bit in terms of how the company as a whole is treating this relationship.
Chief Operating Officer, Brookfield Corporation
As I mentioned, when the Prime Minister decided to terminate his employment with Brookfield, we sought expert advice in terms of ensuring that the rules and regulations that apply to Brookfield as a private enterprise continue to be robust and appropriate to our organization.
I'd say that compliance comes from strong culture and tone at the top. We have, whether it's anti-bribery and corruption, health and safety or whatever the requirements, strong policies and procedures that we put in place in order to manage the application of those regulations across our business. We do that through training of our employees across all of our 2,500 employees, and that training occurs annually. At the end of every year, at least annually, we seek certification from employees that they have complied with those programs.
On top of that, we then—and I mentioned it earlier—have a team of internal auditors, close to 100 across the globe, who help us test and ensure that our processes are appropriate and that any areas for improvement are addressed.
Now, more broadly, with our portfolio companies, we have over 2,000 businesses at any given point in time that we manage across all of our strategies. Those businesses are managed through a governance framework that ensures that management of those businesses are capable, tasked and empowered to run their businesses in the best interest of that business.
We started, before our asset management business was launched, as owner-operators of businesses. Our bias to investing is to ensure that decision-making is as close to the business as possible. We don't want people in Canada making decisions about how port operations should work in Sydney. We are looking at a framework where we provide governance and we provide oversight. In some cases where we have to be stringent, such as anti-bribery and corruption, we ensure that all of our businesses adopt very specific policies. Otherwise, we want to make sure that the businesses are able to operate freely and in the best interests of the company.
As far as lobbying is concerned, which is what applies to Brookfield, we ensure that those businesses adopt rules and policies similar to ours but managed at the portfolio company. Management teams of those portfolio companies are accountable to us as normally sitting on their boards to ensure that all of those processes and procedures are in place, just like we are accountable to our board for the same.
Liberal
Leslie Church Liberal Toronto—St. Paul's, ON
Maybe changing tack for a moment, how many shareholders are there in Brookfield, a ballpark number?