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Conflict-of-interest screens working well, Trudeau cabinet ministers say

Minister of Fisheries, Oceans and the Canadian Coast Guard, Dominic LeBlanc speaks during an announcement at the Sea Island Canadian Coast Guard Base, in Richmond, B.C., on Wednesday February 15, 2017. THE CANADIAN PRESS/Darryl Dyck
October 30, 2017 - 5:26 PM

OTTAWA - Several members of Prime Minister Justin Trudeau's cabinet are singing the praises of conflict-of-interest screens they have been using to avoid controversy — and that members of the previous Conservative government used as well.

The screens, along with the use of numbered holding companies to separate ministers from their assets, have been pulled into an intense public debate in recent weeks amid allegations of conflict of interest that have stalked Finance Minister Bill Morneau.

Morneau set up one of the screens after entering office in 2015 on a recommendation from the federal ethics commissioner, who told him a blind trust wouldn't be necessary since his shares in his family's firm were indirectly held through private companies, and therefore not subject to the Conflict of Interest Act.

And he's not the only one: Justice Minister Jody Wilson-Raybould had a similar arrangement with assets until they were divested in April 2016.

Political opponents have been attacking Morneau for choosing a screen rather than a blind trust. For his part, Morneau has maintained that has not been in a conflict of interest. And Morneau's parliamentary secretary, Joel Lightbound, went on the offensive on his behalf Monday during question period.

"What the finance minister has always done and will continue to do, so that he can deliver for Canadians, is to work with the ethics commissioner to make sure that all rules are followed, to follow recommendations," Lightbound said in response to a question from Conservative finance critic Pierre Poilievre.

Former Tory finance minister Joe Oliver was the sole owner of a corporation that held publicly traded securities, Lightbound noted. And former Conservative cabinet ministers Lisa Raitt and Denis Lebel both made use of conflict-of-interest screens, he added.

"What I see is a bit of hypocrisy and a lot of amnesia,” Lightbound said.

"At the same time, I can understand why those members are trying to forget their decade in power. Millions of Canadians are trying to forget."

Ethics commissioner Mary Dawson’s office said Monday that fewer than five cabinet ministers currently hold controlled assets indirectly. But it would not share the names nor provide a more-precise number.

A government source said later Monday that only two current ministers had a history of controlled assets in a private corporation without setting up a blind trust: Morneau and Wilson-Raybould.

Morneau is in the process of divesting and Wilson-Raybould has already divested.

Dawson’s office also said some cabinet ministers in the previous Conservative administration — but fewer than five — held controlled assets indirectly.

In a series of tweets Monday, Oliver said after his appointment to cabinet he disclosed all his assets, sold all his publicly traded shares and had all decisions on his fund portfolios made by third-party managers.

A few of Morneau's cabinet colleagues also have screens, but for different reasons.

Wilson-Raybould and Infrastructure Minister Amarjeet Sohi are using conflict-of-interest screens to prevent them from participating in matters or decisions related to company holdings involving their spouses.

Fisheries Minister Dominic LeBlanc also has a screen to ensure he abstains from participating in decisions related to J.D. Irving Ltd. because of his close friendship with the Irving family.

LeBlanc said Monday that Dawson recommended he set up an ethics screen for any cabinet or privy council documents that have anything to do with J.D. Irving Ltd., or its affiliates and subsidiaries.

"Under the rules, you shouldn't be using ... your public office to benefit a friend," LeBlanc said. "From my perspective it's working very well."

LeBlanc's screen, in place since early 2016, means he wouldn't have been privy to cabinet information about shipbuilding contracts or even the Energy East pipeline, both of which have connections to Irving.

Sohi said Monday that he has a screen in place to prevent him from participating in decisions that could benefit his wife's holdings in a company that's also a partial owner of farmland in Alberta.

He argues the screen, which is overseen by his chief of staff, has already proven to be an effective tool.

Sohi said because of the screen he's been him removed from the approval process for an infrastructure project that was proposed by the province. It would be in close proximity to the farmland.

"My chief of staff has made sure that I do not participate in any shape or form in the approval of that particular project," Sohi said.

"It will be done by a different minister and it would have to go the Treasury Board to make sure there's no conflict whatsoever."

Wilson-Raybould's profile on the ethics commissioner's website states that she must abstain from decisions or matters related to self-government talks with First Nations and Indigenous communities with the consulting company, KaLoNa Group, in which she holds a significant interest. Her spouse is also the president and controlling interest holder of the firm.

The added public scrutiny on the conflict-of-interest issue has been driven by allegations related to pension legislation Morneau introduced in the House of Commons.

Opponents allege the pension reform could benefit Morneau Shepell, a human resources and pension management firm he helped build with his father before entering office. Morneau maintains he was never in a conflict of interest.

In response to accusations that he's personally profited from decisions he's taken as finance minister, Morneau has promised to sell off $21 million worth of shares in his family's company and place the rest his substantial assets in a blind trust.

Morneau has also promised to donate to charity any gains in the value of his Morneau Shepell shares since he was elected two years ago. The gains are estimated to be worth more than $5 million.

Dawson recommended the screen for Morneau to prevent any appearance of a conflict of interest and maintain the public's confidence.

The issue of indirect holdings in a company have been at the centre of the debate around Morneau.

Dawson urged the previous Conservative government in 2013 to amend the law to require blind trusts for personal assets owned by ministers, regardless of whether they were directly or indirectly owned — a change that was never made.

News from © The Canadian Press, 2017
The Canadian Press

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