The so-called “Morneau Scandal” over the finance minister's failure to put his personal assets in a blind trust has been a farce in many ways, with mainstream media failing to recognize the real scandal plaguing the government’s financial control system.
First, the tempest in a teapot. While he wasn’t legally required to do so, Finance Minister Bill Morneau made the mistake of not putting his financial holdings, which may run to $40 million, into a blind trust.
The office of the Conflict of Interest and Ethics Commissioner didn’t object to the fact that Morneau didn’t put his fortune in a blind trust.
Nevertheless, the vultures sensed an opportunity to embarrass and possibly bring down the Trudeau government’s number two man.
“This finance minister used a loophole to keep himself invested in a financial company which he regulates,” Conservative finance critic Pierre Poilievre said in the House of Commons, “all the while going across the country calling honest plumbers and farmers tax cheats.”
National Post columnist Brian Platt criticized Morneau for not being in Parliament all week, and instead travelling out of province to make announcements on the government’s small business tax reforms.
But this was a case of Parliamentary Press Gallery journalists being so hungry for blood that most of them ignored the truth about blind trusts and never looked for the bigger issues behind the story.
As the Toronto Star reported, Duff Conacher, co-founder of the advocacy group Democracy Watch, said that a blind trust would offer no guarantees that Morneau — or any elected official — can operate without conflicts of interest. He called blind trusts “a sham” because they don’t absolve a politician of the knowledge of the shares they own or investments they’ve previously made.
If some economic development threatened Morneau’s fortune, I’m sure he would find a way of signalling the trustees as to what they should do.
Morneau’s assets are so widespread that it would be almost impossible for him to create a budget that would not touch companies and funds he owns shares in. And his wife Nancy McCain — yes, of that family of McCains — must also be worth a few million and have shares in many corporations.
One conflict has popped up already. Morneau has been pushing a bill through Parliament, Bill C-27, that would improve business opportunities for firms like Morneau Shepell — the family company in which the finance minister holds shares.
Incidentally, the Public Service Alliance of Canada wants the bill withdrawn because it says it would open the door to a disturbing trend of shifting all the risk of pension plans onto workers and retirees. So much for progressivism!
Now that the Liberals have dipped into the Bay Street pool to get their man, it comes down to a matter of trust. Do we trust Bill Morneau not to fiddle with the government budget to benefit himself?
Interestingly, when this all blew up on Morneau, he was trying to put a tax change in place that would have accomplished a little to improve tax fairness in the country. Morneau’s old Bay Street crowd and others had such privileged access to mainstream media that they’ve been able to beat up on the plans.
The larger issues not discussed concern the tax masquerade system that aids the already wealthy created by the Liberals and Conservatives over many years.
Should a man who is part of the most wealthy and powerful clique in the country be made minister of finance? The conflicts and decisions he has to make are much more complicated than whether he has a blind trust for his own money.
Morneau has all kinds of numbered companies. Writes Kelly McParland in The National Post: “He has holdings in Alberta, though he lives in Ontario, perhaps because Alberta offered tax advantages. He has a chateau in France owned by a company he forgot to mention. He has holding companies for his own family, and participates in one for his wife’s family. He’s got investment companies, real estate companies and condos in Florida. And, of course, he has the companies that hold his shares in the family firm, if technically indirectly.”
This is the Liberal way, and I think the job calls for someone who does not have so many complicated assets and doesn’t have all those connections and obligations to serve the power elite on Bay Street.
A greater test will come for Morneau, Trudeau and the Liberals: Are they serious about creating a more just tax system?
Bill Morneau not only belongs to the 1 per cent of the most wealthy people in the country. He’s almost certainly part of the .1 per cent. The gap between the 1 per cent of and the rest of Canadians keeps widening.
Will Morneau reverse the terribly unfair system we live under? I doubt it. To begin with, the government’s knee jerk reaction to drop the Small Business Tax to 9 per cent from 11 per cent in 2019 is not a progressive move.
The country’s main corporate tax rate, now 15 per cent, is just about half of what it was a few years ago. Neoliberals would abolish corporate taxes entirely. Hopefully, this is not where the Liberals are headed. Further reductions in corporate taxes would mean a larger burden for Trudeau’s fabled middle class, as well as fewer funds to provide the services Canadians expect. Canadian corporations and individuals hold billions of dollars offshore under somewhat shady circumstances. There has been a lot of talk from government that it will go after taxes owed to the country. Let’s see the proof, and let’s name names.
Nick Fillmore is a Toronto freelance journalist and a frequent contributor to Ricochet. Please visit his blog and subscribe: nickfillmore.blogspot.com