Mr. Speaker, I would like to thank my colleague for sharing his precious speaking time with me, allowing me to address the House concerning the motion before us today that we have been debating since this morning.
We have heard opinions from both sides of the House, but the Liberals have yet to say anything impressive in defence of the Minister of Finance. Rather, they have tried to change the channel. They have tried to take the focus off the problem at hand. For my part, for the 10 minutes allotted to me, I will stick to the motion before us.
The first part of this motion sets out the facts regarding the matter at hand, namely, the situation with the finance minister and his company, Morneau Shepell. The minister led us to believe that he had placed his shares in Morneau Shepell in a blind trust when in fact he had never done so. His story was even corroborated by his Liberal caucus colleagues. The minister had many opportunities to clarify this situation. Everyone believed that he had placed his holdings in a blind trust. The media reported that such was the case, and the minister even allowed his own company to believe that that is what he had done. When the truth came out, everyone saw that he had not in fact put his holdings in a blind trust. The minister had never bothered to set the record straight since being sworn in two years ago. Everyone believed that he was telling the truth about his holdings. The first part of the motion points out the discrepancy, which the Minister of Finance never bothered to clarify.
The second part of the motion deals with the fact that the minister used a loophole in the Conflict of Interest Act. I can confirm that there is indeed a loophole, not because I used it like the finance minister, but because I heard witnesses talking about it when they appeared before the Standing Committee on Access to Information, Privacy and Ethics, which I chaired for two years.
The Ethics Commissioner appeared before the committee to present her recommendations following her five-year review of the Conflict of Interest Act. That happened in 2013. The next review will take place in 2018 and will be a good opportunity to close the loophole that we are talking about today.
In 2013, the commissioner made over 70 recommendations to update the Conflict of Interest Act. Those recommendations apply to ministers and public office holders. They do not apply only to ministers, but also to some senior officials in the Canadian public service. These public office holders must obey this law. In 2013, the commissioner pointed out a number of problems with the act and proposed ways of making it more effective and updating it to reflect changes in technology.
In her report, she clearly states that the wording of the act specifies direct control, saying that a minister cannot have direct control over a company’s shares. She says that, according to the language, a minister could have indirect control. She raised this question as if she were a visionary who could see that infringements of the act might occur. A public office holder may decide to comply only with the letter of the law, that is, to avoid exercising direct control over a company’s shares, without complying with the spirit of the law.
I can just see the Minister of Finance and his army of lawyers and accountants going to the Office of the Conflict of Interest and Ethics Commissioner and asking a lot of questions, and being told that he cannot exercise direct control over shares, but that he can exercise indirect control over them.
His advisors and lawyers tell him that the only thing to do is to register a company without bothering to give it a name. He can just give it a number, then register it in Alberta where corporate income tax rates are lowest. He can register all of Morneau Shepell’s shares in his company. Thus, he will be the sole shareholder of a numbered company in Alberta.
His lawyers are very smart, and we must give them credit, because their job was to find loopholes in the act, and that is what they are paid for. They did what the minister asked. He asked them to find a way of allowing him to control his shares while complying with the letter of the law.
They told him that they found the solution, that all he had to do was register a company. That is what he did and, for two years, he has had us believe that his situation was in order and that he had even placed his assets in a blind trust. Of course, the blind trust would respect both the letter and the spirit of the law, although this raises questions in any case, because, at the end of his term, the minister can always put the assets back in his name.
There are some misgivings about blind trusts, but that would have at least complied with the spirit of the law. However, the minister decided to do something else, and that is why he is being asked today to apologize to the House. He put himself in a conflict of interest or in a situation strongly suggesting a conflict of interest.
If any ethics professors are looking for the perfect example of a situation that suggests a conflict of interest, I think this situation with the Minister of Finance is ideal.
The minister is still in control of his shares in a large Canadian company, Morneau Shepell. This company sometimes deals directly with the Government of Canada. In general, it specializes in pension administration.
The company's value even increased when the Minister of Finance, who still had control over his holdings, introduced a bill that was good for his company. We are not the ones who came up with the idea that Bill C-27 would benefit his company. He said so himself in 2013 that a bill like this could benefit his company and would be the ideal thing for the company's growth and positioning. He said that in 2013 when he was still part of the family business. We did not come up with the idea that he profited from this. We can simply look at the numbers and see that this was indeed the case. The market responded favourably when the bill was introduced even though it had not yet been passed.
As soon as the bill was introduced the markets responded favourably because investors felt that there was a potential for growth for Morneau Shepell.
The minister personally profited from the increased value in his company when he introduced the bill. Imagine what things would look like if the bill had passed.
The bill is still on the order paper, but it has not yet been passed. However, we can just imagine how much this company would profit from the bill passing.
Who benefits in the end?
The Minister of Finance does.
However, he finally gave in to the evidence and acknowledged his mistakes by changing his financial situation with the Conflict of Interest and Ethics Commissioner as a result of public pressure. He did not seem thrilled to do so. He had probably worked out some elaborate strategy to maintain control, but under pressure, the minister finally decided to change his situation.
He did so because he saw that he had no other choice.
I mused earlier about the minister and his lawyers before the Conflict of Interest and Ethics Commissioner, and I can also imagine another scenario, one where the Prime Minister called him and told him to sort this out or find another job.
I would say he did not have much choice. To suggest today that he did so willingly and because he wants to serve Canadians would be to take us for fools. I hope he apologizes so that we can turn the page on this once and for all.