Morneau cleared over stock sale

The Canadian Press
Andy Blatchford

OTTAWA–The federal ethics commissioner has cleared Finance minister Bill Morneau of allegations that he and his father benefited from insider information to save half-a-million dollars on the sale of shares in their family-built company.
Political opponents asked ethics commissioner Mary Dawson to look into several sales of millions of dollars worth of shares in Morneau Shepell Inc. in late 2015 by Morneau and his father.
The sales came just days before a major tax announcement that the minister’s accusers say triggered a dip in the stock market.
Morneau’s December, 2015 announcement raising income taxes on the highest earners had a wide-reaching market impact, they argued, because it encouraged wealthier shareholders to sell off some their stock holdings before the changes came into effect on Jan. 1, 2016.
Doing so meant big savings for the Morneau family, they alleged.
Not so, Dawson said in a Jan. 5 letter to Morneau released yesterday: there was no privileged information acted upon since the tax increase first was announced publicly “well in advance” of the family’s stock sales.
“With respect to the sale of Morneau Shepell Inc. shares in the fall of 2015, I am of the view that you did not benefit from insider information,” wrote Dawson, whose seven-year tenure as conflict of interest and ethics commissioner happened to end yesterday.
She referred to statements to the media made Nov. 4, 2015 by then-House leader Dominic LeBlanc, who said the tax measures would take effect on Jan. 1, 2016.
Dawson also noted the Liberals’ 2015 election platform had promised to introduce the tax changes.
“This was well in advance of the sale of your Morneau Shepell Inc. shares on Nov. 30, 2015, and the tabling of the Dec. 7, 2015 ways and means motion on this matter.”
The other sales by Morneau’s father, William Morneau Sr., were made Nov. 23 and Dec. 3.
In a separate examination, Dawson also cleared Morneau of allegations he was involved in the Bank of Canada’s renewal of its contract with Morneau Shepell to manage its employee pension plan.
The Bank of Canada renewed its contract with the company for four years in February, 2017.
Dawson said she opted to close the matter after reviewing documents provided by the Bank of Canada and comments sent to her by Morneau’s counsel.
“I am satisfied that, as minister of finance, you had no involvement in the Bank of Canada’s decision of the renewal of the Morneau Shepell Inc. contract.”
Morneau’s name, however, has yet to be fully cleared by the ethics commissioner’s office, which has another formal examination underway related to his connection to Morneau Shepell.
The review was launched amid conflict-of-interest allegations over proposed pension reform spearheaded by Morneau.
Opponents say the legislation would have brought him personal financial benefit while Morneau has denied the conflict-of-interest accusations.
A spokeswoman for the commissioner’s office confirmed Monday in an e-mail that the examination remains active.
A spokeswoman for Morneau said yesterday that his office was “pleased with the outcome” of the commissioner’s latest examination.
“The minister will continue to work with the office of the ethics commissioner to ensure he is in full compliance with the rules,” Chloe Luciani-Girouard wrote in an e-mail.
“The minister has gone above and beyond the initial recommendations from the ethics commissioner by divesting all his family’s holdings in his former company.”
However, Conservative finance critic Pierre Poilievre continued to say yesterday that Morneau was wrong to sell his shares shortly before introducing the tax hike on the wealthiest Canadians–whether or not he actually broke conflict-of-interest rules.
“Conservatives believe it is unwise for ministers to buy or sell shares in the weeks immediately before the introduction of tax measures,” Poilievre said in a statement.
“Finance ministers should lead by example,” he added.
“It is not good enough for ministers to boast that their actions are not illegal.”