Key changes also needed to stop Big Bank gouging and abuse – Canada’s Big 6 Banks made a record profit of $42.3 billion in 2017

FOR IMMEDIATE RELEASE:
Tuesday, January 16, 2018

Today, Democracy Watch revealed that more than 10,000 voters from across Canada have signed its national petition on Change.org calling for key changes to make Canada’s big businesses and Big Banks pay their fair share of taxes.

A special report recently published in the Toronto Star details how Canadian big businesses, especially the Big Banks, have higher profits but pay a lower rate of taxes than ever before.

“Like Scrooge, Canada’s big businesses and banks are trying to keep all the money for themselves, and key changes are needed to close loopholes and match the average tax rate in G7 countries to ensure they pay their fair share of taxes,” said Duff Conacher, Co-founder of Democracy Watch. “As well, Canada’s big banks have gouged their way to record profits again this year, and key changes are needed to stop the gouging and ensure they serve all customers fairly at fair prices.”

In 2016, big businesses paid only 22% of total taxes collected by governments — Canadians paid 78%. In contrast, in 1952 big businesses and Canadians paid the same amount in taxes.

As the report says: “Canada’s largest corporations use complex techniques and tax loopholes to reduce their taxes significantly below the official corporate tax rate set by the government.”

As well, the report details how cutting Canada’s corporate tax rate by 16% from 1997 to 2016 has not increased corporate investment in machinery and equipment and in intellectual property like it was supposed to do. Investments by Canada’s big businesses in these areas are still below the 1997 level as a percentage of GDP.

Canada’s official corporate tax rate is now 26.6% but, on average, Canadian big businesses paid only 17.7% from 2011-2016 — one of the lowest rates of all G7 countries.

Canada’s Big Banks paid a tax rate of only 16% over the past 6 years — lower than banks in other G7 countries. They are the biggest tax evaders of all Canadian big businesses and, not surprisingly, also the most profitable. They made a record $42.3 billion in profits in 2017.

If Canada’s big businesses and banks paid the official tax rate from 2011-2016, governments across Canada would have almost $64 billion more to spend on making hospitals, schools, housing, public transit and roads better, and on other things Canadians need.

Making Canada’s big businesses and banks pay their fair share in taxes will raise at least $10 billion each year, and billions more if the corporate tax rate is increased to the average rate in G7 countries.

The petition calls on Liberal Finance Minister Morneau to work with federal political parties to work together to make the following three key changes:

1. Close all the loopholes that allow Canada’s big businesses and banks to evade paying taxes in Canada by pretending they make their money through companies they own in low-tax countries;
2. Increase Canada’s business tax rate to match the average rate in G7 countries, and;
3. Impose a special tax (like England and Australia have) on any Canadian business or bank that has excessively high profits like Canada’s Big Banks have had in the past several years.

Democracy Watch is also calling on Finance Minister Morneau to work with federal political parties to make key changes to stop gouging and abuse by Canada’s big banks. The Big Six Banks made a record $42.3 billion profit in 2017.

As the report also shows, most Canadians don’t benefit from excessive Big Bank profits because they don’t own shares in the banks. As the report says: “more than 80 per cent of Canadian stocks are owned (both directly and indirectly through pensions and mutual funds) by foreigners and the wealthiest households in the country.”

As well, the report reveals that Canada’s Big Banks donate to charities only 10% of what they avoid in taxes – only $2.1 billion donated compared to $23 billion in taxes avoided.

– 30 –

FOR MORE INFORMATION, CONTACT:
Duff Conacher, Co-founder of Democracy Watch
Tel: (613) 241-5179
Cell: 416-546-3443
[email protected]

Democracy Watch’s Bank Accountability Campaign and Corporate Responsibility Campaign

Key changes also needed to stop Big Bank gouging and abuse – Canada’s Big 6 Banks made a record profit of $42.3 billion in 2017

FOR IMMEDIATE RELEASE:
Tuesday, January 16, 2018

Today, Democracy Watch revealed that more than 10,000 voters from across Canada have signed its national petition on Change.org calling for key changes to make Canada’s big businesses and Big Banks pay their fair share of taxes.

A special report recently published in the Toronto Star details how Canadian big businesses, especially the Big Banks, have higher profits but pay a lower rate of taxes than ever before.

“Like Scrooge, Canada’s big businesses and banks are trying to keep all the money for themselves, and key changes are needed to close loopholes and match the average tax rate in G7 countries to ensure they pay their fair share of taxes,” said Duff Conacher, Co-founder of Democracy Watch. “As well, Canada’s big banks have gouged their way to record profits again this year, and key changes are needed to stop the gouging and ensure they serve all customers fairly at fair prices.”

In 2016, big businesses paid only 22% of total taxes collected by governments — Canadians paid 78%. In contrast, in 1952 big businesses and Canadians paid the same amount in taxes.

As the report says: “Canada’s largest corporations use complex techniques and tax loopholes to reduce their taxes significantly below the official corporate tax rate set by the government.”

As well, the report details how cutting Canada’s corporate tax rate by 16% from 1997 to 2016 has not increased corporate investment in machinery and equipment and in intellectual property like it was supposed to do. Investments by Canada’s big businesses in these areas are still below the 1997 level as a percentage of GDP.

Canada’s official corporate tax rate is now 26.6% but, on average, Canadian big businesses paid only 17.7% from 2011-2016 — one of the lowest rates of all G7 countries.

Canada’s Big Banks paid a tax rate of only 16% over the past 6 years — lower than banks in other G7 countries. They are the biggest tax evaders of all Canadian big businesses and, not surprisingly, also the most profitable. They made a record $42.3 billion in profits in 2017.

If Canada’s big businesses and banks paid the official tax rate from 2011-2016, governments across Canada would have almost $64 billion more to spend on making hospitals, schools, housing, public transit and roads better, and on other things Canadians need.

Making Canada’s big businesses and banks pay their fair share in taxes will raise at least $10 billion each year, and billions more if the corporate tax rate is increased to the average rate in G7 countries.

The petition calls on Liberal Finance Minister Morneau to work with federal political parties to work together to make the following three key changes:

1. Close all the loopholes that allow Canada’s big businesses and banks to evade paying taxes in Canada by pretending they make their money through companies they own in low-tax countries;
2. Increase Canada’s business tax rate to match the average rate in G7 countries, and;
3. Impose a special tax (like England and Australia have) on any Canadian business or bank that has excessively high profits like Canada’s Big Banks have had in the past several years.

Democracy Watch is also calling on Finance Minister Morneau to work with federal political parties to make key changes to stop gouging and abuse by Canada’s big banks. The Big Six Banks made a record $42.3 billion profit in 2017.

As the report also shows, most Canadians don’t benefit from excessive Big Bank profits because they don’t own shares in the banks. As the report says: “more than 80 per cent of Canadian stocks are owned (both directly and indirectly through pensions and mutual funds) by foreigners and the wealthiest households in the country.”

As well, the report reveals that Canada’s Big Banks donate to charities only 10% of what they avoid in taxes – only $2.1 billion donated compared to $23 billion in taxes avoided.

– 30 –

FOR MORE INFORMATION, CONTACT:
Duff Conacher, Co-founder of Democracy Watch
Tel: (613) 241-5179
Cell: 416-546-3443
[email protected]

Democracy Watch’s Bank Accountability Campaign and Corporate Responsibility Campaign

Third court case filed concerning Ethics Commissioner – already challenging her illegal ethics screens, and her illegal re-appointment by Trudeau Cabinet

Will soon file fourth case challenging Ethics Commissioner’s failure to remove herself from ruling on complaints about Morneau – she is biased due to past advice to him, and given Trudeau Cabinet handed her a renewable contract in June

FOR IMMEDIATE RELEASE:
Tuesday, November 21, 2017

OTTAWA – Today, Democracy Watch released details about the lawsuit it filed last Thursday in the Federal Court of Appeal challenging the Ethics Commissioner’s decision that Finance Minister Bill Morneau did not need to sell the shares he owned in his family’s company, Morneau Shepell Inc.

“As she has many times in the past, Ethics Commissioner Mary Dawson once again allowed a Cabinet minister to violate the federal ethics law, and so as it has many times in the past, Democracy Watch is once again challenging the Ethics Commissioner in court,” said Duff Conacher, Co-founder of Democracy Watch. “All of these court cases would be unnecessary if the Ethics Commissioner would just do her job and enforce federal ethics rules properly and effectively.”

Subsection 27(1) of the Conflict of Interest Act requires ministers, their staff, Cabinet appointees (including Deputy Ministers) and other senior government officials to either sell investments they control (such as shares in a family company) or place them in a blind trust, and the section 20 definition of “controlled assets” is clearly broad enough to cover the investment scheme that Morneau set up to hide his Morneau Shepell shares.

Instead of requiring Minister Morneau to sell the shares or put them in a blind trust, Ethics Commissioner Dawson allowed him to set up what she calls a conflict of interest “screen” that, she claims, prevents him from taking part in discussions and decisions if he has a conflict of interest. In fact, the Ethics Commissioner’s screens are smokescreens that allow Cabinet ministers and others to take part in almost all discussions and decisions even if they have a financial interest and could profit from the decision.

Similar “screens” allow many other Cabinet ministers, ministerial staff and senior government officials to make decisions that affect their families, friends, and their own financial investments, which is why Democracy Watch has challenged the Ethics Commissioner’s smokescreens in court because they are illegal under the Act.

Democracy Watch has also filed a court case challenging the Ethics Commissioner for being in a conflict of interest because the Trudeau Cabinet’s re-appointed her last June to her third six-month interim term — so she is essentially currently serving at the pleasure of the Trudeau Cabinet.

Democracy Watch will also soon file another lawsuit against Ethics Commissioner Mary Dawson because she has refused to recuse herself from investigating complaints filed by Democracy Watch and the NDP MP Nathan Cullen and Conservative MP Pierre Poilievre.  The Ethics Commissioner is biased in making future decisions given that she advised Minister Morneau that selling his shares was not required, and established a conflict of interest “screen” for him that she believes works, and is essentially serving at the pleasure of the Trudeau Cabinet.

Background on the lawsuit filed last Thursday

On November 4, 2015, the day he was appointed as Minister of Finance, Minister Morneau told CBC TV: “I suspect all my assets will go into a blind trust” and “I’ve already communicated with the Ethics Commissioner in that regard.”  At the time, his assets included 4.7 percent of the stocks of Morneau Shepell Inc., valued at more than $30 million.

On February 2, 2016, the Commissioner provided a letter to Minister Morneau that claimed that he did “not personally hold any assets that are considered controlled under the Act” but that, given Morneau owned millions of dollars of shares in Morneau Shepell Inc., “the Commissioner is of the opinion that the best measure of compliance would be to establish a conflict of interest screen which would be made public.”

The letter was confidential and neither Minister Morneau nor the Commissioner disclosed what exactly Minister Morneau did with the stocks he owned of Morneau Shepell Inc., and specifically neither disclosed whether the Commissioner had required him to sell the stocks or put them in a blind trust, until October 17, 2017.  On that day, the Ethics Commissioner told media in general terms that she had advised Minister Morneau that he “wasn’t required” to set up a blind trust when he was appointed as Minister of Finance.

On October 19, 2017, Minister Morneau disclosed to the media the Commissioner’s February 2, 2016 Decision letter.

Appointment Process and Ethics Rules Must be Strengthened

More than 10,000 Canadians have signed a petition supporting Democracy Watch call for federal parties to work together to change the appointment process for the Ethics Commissioner, and all officers of Parliament and judicial and watchdog positions, to make it actually merit-based and independent from Cabinet, and to prohibit reappointments.

Minister Morneau’s new blind trust for his other holding company assets will, like all blind trusts, be a sham because he will still know that he owns the investments that he puts in the trust, and he is also allowed under subsection 27(4) to choose his trustee, and is allowed under subsection 27(5) to give them instructions concerning the investments in the trust.

“Loopholes in the federal ethics law allow Finance Minister Morneau to continue to make decisions that affect his family’s company and his investments, so to actually be ethical he must not take part in any future decisions that affect the company or the investments directly or indirectly,” said Duff Conacher, Co-founder of Democracy Watch. “Minister Morneau’s blind trust will be a sham, as all blind trusts are, because he will know what investments he puts in the trust, will choose the trustee, and can give general instructions to the trustee about the investments.”

“Prime Minister Trudeau and all other Cabinet ministers and senior government officials, should be required to sell their investments in any company and buy term deposits or Canadian governments’ bonds until they leave office.  If they are not required to do this, they must be required not to take part in decisions that directly or indirectly their investments,” said Conacher.

Democracy Watch has called repeatedly since 2007 for these huge loopholes in the Conflict of Interest Act to be closed.  “It really should be called the ‘Almost Impossible to be in a Conflict of Interest Act,’” said Conacher.

– 30 –

FOR MORE INFORMATION, CONTACT:
Duff Conacher, Co-founder of Democracy Watch
and Chairperson of the Government Ethics Coalition
Tel: (613) 241-5179
Cell: 416-546-3443
[email protected]

Democracy Watch’s Government Ethics Campaign and Stop Bad Government Appointments Campaign

Third court case filed concerning Ethics Commissioner – already challenging her illegal ethics screens, and her illegal re-appointment by Trudeau Cabinet

Will soon file fourth case challenging Ethics Commissioner’s failure to remove herself from ruling on complaints about Morneau – she is biased due to past advice to him, and given Trudeau Cabinet handed her a renewable contract in June

FOR IMMEDIATE RELEASE:
Tuesday, November 21, 2017

OTTAWA – Today, Democracy Watch released details about the lawsuit it filed last Thursday in the Federal Court of Appeal challenging the Ethics Commissioner’s decision that Finance Minister Bill Morneau did not need to sell the shares he owned in his family’s company, Morneau Shepell Inc.

“As she has many times in the past, Ethics Commissioner Mary Dawson once again allowed a Cabinet minister to violate the federal ethics law, and so as it has many times in the past, Democracy Watch is once again challenging the Ethics Commissioner in court,” said Duff Conacher, Co-founder of Democracy Watch. “All of these court cases would be unnecessary if the Ethics Commissioner would just do her job and enforce federal ethics rules properly and effectively.”

Subsection 27(1) of the Conflict of Interest Act requires ministers, their staff, Cabinet appointees (including Deputy Ministers) and other senior government officials to either sell investments they control (such as shares in a family company) or place them in a blind trust, and the section 20 definition of “controlled assets” is clearly broad enough to cover the investment scheme that Morneau set up to hide his Morneau Shepell shares.

Instead of requiring Minister Morneau to sell the shares or put them in a blind trust, Ethics Commissioner Dawson allowed him to set up what she calls a conflict of interest “screen” that, she claims, prevents him from taking part in discussions and decisions if he has a conflict of interest. In fact, the Ethics Commissioner’s screens are smokescreens that allow Cabinet ministers and others to take part in almost all discussions and decisions even if they have a financial interest and could profit from the decision.

Similar “screens” allow many other Cabinet ministers, ministerial staff and senior government officials to make decisions that affect their families, friends, and their own financial investments, which is why Democracy Watch has challenged the Ethics Commissioner’s smokescreens in court because they are illegal under the Act.

Democracy Watch has also filed a court case challenging the Ethics Commissioner for being in a conflict of interest because the Trudeau Cabinet’s re-appointed her last June to her third six-month interim term — so she is essentially currently serving at the pleasure of the Trudeau Cabinet.

Democracy Watch will also soon file another lawsuit against Ethics Commissioner Mary Dawson because she has refused to recuse herself from investigating complaints filed by Democracy Watch and the NDP MP Nathan Cullen and Conservative MP Pierre Poilievre.  The Ethics Commissioner is biased in making future decisions given that she advised Minister Morneau that selling his shares was not required, and established a conflict of interest “screen” for him that she believes works, and is essentially serving at the pleasure of the Trudeau Cabinet.

Background on the lawsuit filed last Thursday

On November 4, 2015, the day he was appointed as Minister of Finance, Minister Morneau told CBC TV: “I suspect all my assets will go into a blind trust” and “I’ve already communicated with the Ethics Commissioner in that regard.”  At the time, his assets included 4.7 percent of the stocks of Morneau Shepell Inc., valued at more than $30 million.

On February 2, 2016, the Commissioner provided a letter to Minister Morneau that claimed that he did “not personally hold any assets that are considered controlled under the Act” but that, given Morneau owned millions of dollars of shares in Morneau Shepell Inc., “the Commissioner is of the opinion that the best measure of compliance would be to establish a conflict of interest screen which would be made public.”

The letter was confidential and neither Minister Morneau nor the Commissioner disclosed what exactly Minister Morneau did with the stocks he owned of Morneau Shepell Inc., and specifically neither disclosed whether the Commissioner had required him to sell the stocks or put them in a blind trust, until October 17, 2017.  On that day, the Ethics Commissioner told media in general terms that she had advised Minister Morneau that he “wasn’t required” to set up a blind trust when he was appointed as Minister of Finance.

On October 19, 2017, Minister Morneau disclosed to the media the Commissioner’s February 2, 2016 Decision letter.

Appointment Process and Ethics Rules Must be Strengthened

More than 10,000 Canadians have signed a petition supporting Democracy Watch call for federal parties to work together to change the appointment process for the Ethics Commissioner, and all officers of Parliament and judicial and watchdog positions, to make it actually merit-based and independent from Cabinet, and to prohibit reappointments.

Minister Morneau’s new blind trust for his other holding company assets will, like all blind trusts, be a sham because he will still know that he owns the investments that he puts in the trust, and he is also allowed under subsection 27(4) to choose his trustee, and is allowed under subsection 27(5) to give them instructions concerning the investments in the trust.

“Loopholes in the federal ethics law allow Finance Minister Morneau to continue to make decisions that affect his family’s company and his investments, so to actually be ethical he must not take part in any future decisions that affect the company or the investments directly or indirectly,” said Duff Conacher, Co-founder of Democracy Watch. “Minister Morneau’s blind trust will be a sham, as all blind trusts are, because he will know what investments he puts in the trust, will choose the trustee, and can give general instructions to the trustee about the investments.”

“Prime Minister Trudeau and all other Cabinet ministers and senior government officials, should be required to sell their investments in any company and buy term deposits or Canadian governments’ bonds until they leave office.  If they are not required to do this, they must be required not to take part in decisions that directly or indirectly their investments,” said Conacher.

Democracy Watch has called repeatedly since 2007 for these huge loopholes in the Conflict of Interest Act to be closed.  “It really should be called the ‘Almost Impossible to be in a Conflict of Interest Act,’” said Conacher.

– 30 –

FOR MORE INFORMATION, CONTACT:
Duff Conacher, Co-founder of Democracy Watch
and Chairperson of the Government Ethics Coalition
Tel: (613) 241-5179
Cell: 416-546-3443
[email protected]

Democracy Watch’s Government Ethics Campaign and Stop Bad Government Appointments Campaign

Democracy Watch already has two court cases against the Ethics Commissioner – one challenging her illegal ethics screens, and the other challenging the six-month, renewable contract handed to her by the Trudeau Cabinet in June

FOR IMMEDIATE RELEASE:
Tuesday, October 31, 2017

OTTAWA – Today, Democracy Watch confirmed that it will file a new court case against federal Ethics Commissioner Mary Dawson because she has failed to recuse herself from investigating complaints about Finance Minister Bill Morneau, and because she made a legally incorrect decision to allow Morneau and other ministers to keep owning investments while they are in Cabinet.

In an open letter sent last Wednesday, Democracy Watch called for an investigation by an independent person of Minister Morneau’s failure to issue public statements (as required under subsection 25(1) of the Act) containing details about at least two recusals that the Minister himself admitted to recently.

The NDP has also filed a complaint requesting that the Ethics Commissioner investigate whether Minister Morneau violated the Conflict of Interest Act by participating in the development of Bill C-27, a bill that, if enacted, would help his family company and benefit the company’s shares that he owns and is finally planning to sell.

In its letter, Democracy Watch requested that the Ethics Commissioner recuse herself from ruling on the Morneau situation and delegate the complaints to an independent person.  The Ethics Commissioner has continued to address the Morneau situation, including meeting with Minister Morneau last Thursday.

The Ethics Commissioner is biased in making future decisions given that she advised Minister Morneau that a blind trust was not needed, and established a conflict of interest “screen” for him, and is essentially serving at the pleasure of the Trudeau Cabinet on a six-month, renewable contract.  All that Democracy Watch has to prove in court is that a reasonable, informed person would conclude that it is likely that the Ethics Commissioner, consciously or unconsciously, will not investigate and rule on the Morneau complaints fairly.

The Alberta Ethics Commissioner recused herself last year from investigating a case in which she had a bias and assigned the case to the B.C. ethics commissioner.

“The Ethics Commissioner is refusing to admit she is biased even though the Trudeau Cabinet handed her a six-month contract worth $100,000 last June, so Democracy Watch hopes its court case will finally stop her from making biased, incorrect bad rulings that allow Cabinet ministers to act unethically,” said Duff Conacher, Co-founder of Democracy Watch.

Democracy Watch court case will also challenge the Ethics Commissioner’s decision that Morneau and other ministers did not need to set up a blind trust or sell the shares he owned in his family’s company, Morneau Shepell.  Subsection 27(1) of the Act requires ministers, their staff, Cabinet appointees (including Deputy Ministers) and other senior government officials to either sell investments they control (such as shares in a family company) or place them in a blind trust, and the section 20 definition of “controlled assets” is clearly broad enough to cover the investment scheme that Morneau set up for his Morneau Shepell shares.

Instead of requiring Minister Morneau to sell the shares or put them in a blind trust, Ethics Commissioner Dawson allowed him to set up what she calls a conflict of interest “screen” that, she claims, prevents him from taking part in discussions and decisions if he has a conflict of interest. In fact, the Ethics Commissioner’s screens are smokescreens that allow Cabinet ministers and others to take part in almost all decisions even if they have a financial interest and could profit from the decision.

Similar “screens” allow many other Cabinet ministers, ministerial staff and senior government officials to make decisions that affect their families, friends, and their own financial investments, which is why Democracy Watch has challenged the Ethics Commissioner’s smokescreens in court because they are illegal under the Act.

Democracy Watch has also filed a court case challenging the Ethics Commissioner for being in a conflict of interest because the Trudeau Cabinet’s re-appointed her last June to her third six-month interim term — so she is essentially currently serving at the pleasure of the Trudeau Cabinet.

More than 10,000 Canadians have signed a petition supporting Democracy Watch call for federal parties to work together to change the appointment process for the Ethics Commissioner, and all officers of Parliament and judicial and watchdog positions, to make it actually merit-based and independent from Cabinet, and to prohibit reappointments.

Minister Morneau’s blind trust, like all blind trusts, will be a sham because he will still know that he owns the investments that he puts in the trust, and he is also allowed under subsection 27(4) to choose his trustee, and is allowed under subsection 27(5) to give them instructions concerning the investments in the trust.

“Loopholes in the federal ethics law allow ministers and other senior government officials to own investments they know about, and to make decisions that make them money,” said Duff Conacher, Co-founder of Democracy Watch.  “To be ethical, Prime Minister Trudeau and all other Cabinet ministers and senior government officials should be required to sell their investments and buy term deposits or government bonds until they leave office, and to not to take part in any discussions or decisions that directly or indirectly affect their relatives’ or friends’ businesses or investments.” 

Democracy Watch has called repeatedly since 2007 for these huge loopholes in the Conflict of Interest Act to be closed.  “It really should be called the ‘Almost Impossible to be in a Conflict of Interest Act,’” said Conacher.

– 30 –

FOR MORE INFORMATION, CONTACT:
Duff Conacher, Co-founder of Democracy Watch
Tel: (613) 241-5179
Cell: 416-546-3443
[email protected]

Democracy Watch’s Democracy Watch’s Government Ethics Campaign and Stop Bad Government Appointments Campaign

Democracy Watch already has two court cases against the Ethics Commissioner – one challenging her illegal ethics screens, and the other challenging the six-month, renewable contract handed to her by the Trudeau Cabinet in June

FOR IMMEDIATE RELEASE:
Tuesday, October 31, 2017

OTTAWA – Today, Democracy Watch confirmed that it will file a new court case against federal Ethics Commissioner Mary Dawson because she has failed to recuse herself from investigating complaints about Finance Minister Bill Morneau, and because she made a legally incorrect decision to allow Morneau and other ministers to keep owning investments while they are in Cabinet.

In an open letter sent last Wednesday, Democracy Watch called for an investigation by an independent person of Minister Morneau’s failure to issue public statements (as required under subsection 25(1) of the Act) containing details about at least two recusals that the Minister himself admitted to recently.

The NDP has also filed a complaint requesting that the Ethics Commissioner investigate whether Minister Morneau violated the Conflict of Interest Act by participating in the development of Bill C-27, a bill that, if enacted, would help his family company and benefit the company’s shares that he owns and is finally planning to sell.

In its letter, Democracy Watch requested that the Ethics Commissioner recuse herself from ruling on the Morneau situation and delegate the complaints to an independent person.  The Ethics Commissioner has continued to address the Morneau situation, including meeting with Minister Morneau last Thursday.

The Ethics Commissioner is biased in making future decisions given that she advised Minister Morneau that a blind trust was not needed, and established a conflict of interest “screen” for him, and is essentially serving at the pleasure of the Trudeau Cabinet on a six-month, renewable contract.  All that Democracy Watch has to prove in court is that a reasonable, informed person would conclude that it is likely that the Ethics Commissioner, consciously or unconsciously, will not investigate and rule on the Morneau complaints fairly.

The Alberta Ethics Commissioner recused herself last year from investigating a case in which she had a bias and assigned the case to the B.C. ethics commissioner.

“The Ethics Commissioner is refusing to admit she is biased even though the Trudeau Cabinet handed her a six-month contract worth $100,000 last June, so Democracy Watch hopes its court case will finally stop her from making biased, incorrect bad rulings that allow Cabinet ministers to act unethically,” said Duff Conacher, Co-founder of Democracy Watch.

Democracy Watch court case will also challenge the Ethics Commissioner’s decision that Morneau and other ministers did not need to set up a blind trust or sell the shares he owned in his family’s company, Morneau Shepell.  Subsection 27(1) of the Act requires ministers, their staff, Cabinet appointees (including Deputy Ministers) and other senior government officials to either sell investments they control (such as shares in a family company) or place them in a blind trust, and the section 20 definition of “controlled assets” is clearly broad enough to cover the investment scheme that Morneau set up for his Morneau Shepell shares.

Instead of requiring Minister Morneau to sell the shares or put them in a blind trust, Ethics Commissioner Dawson allowed him to set up what she calls a conflict of interest “screen” that, she claims, prevents him from taking part in discussions and decisions if he has a conflict of interest. In fact, the Ethics Commissioner’s screens are smokescreens that allow Cabinet ministers and others to take part in almost all decisions even if they have a financial interest and could profit from the decision.

Similar “screens” allow many other Cabinet ministers, ministerial staff and senior government officials to make decisions that affect their families, friends, and their own financial investments, which is why Democracy Watch has challenged the Ethics Commissioner’s smokescreens in court because they are illegal under the Act.

Democracy Watch has also filed a court case challenging the Ethics Commissioner for being in a conflict of interest because the Trudeau Cabinet’s re-appointed her last June to her third six-month interim term — so she is essentially currently serving at the pleasure of the Trudeau Cabinet.

More than 10,000 Canadians have signed a petition supporting Democracy Watch call for federal parties to work together to change the appointment process for the Ethics Commissioner, and all officers of Parliament and judicial and watchdog positions, to make it actually merit-based and independent from Cabinet, and to prohibit reappointments.

Minister Morneau’s blind trust, like all blind trusts, will be a sham because he will still know that he owns the investments that he puts in the trust, and he is also allowed under subsection 27(4) to choose his trustee, and is allowed under subsection 27(5) to give them instructions concerning the investments in the trust.

“Loopholes in the federal ethics law allow ministers and other senior government officials to own investments they know about, and to make decisions that make them money,” said Duff Conacher, Co-founder of Democracy Watch.  “To be ethical, Prime Minister Trudeau and all other Cabinet ministers and senior government officials should be required to sell their investments and buy term deposits or government bonds until they leave office, and to not to take part in any discussions or decisions that directly or indirectly affect their relatives’ or friends’ businesses or investments.” 

Democracy Watch has called repeatedly since 2007 for these huge loopholes in the Conflict of Interest Act to be closed.  “It really should be called the ‘Almost Impossible to be in a Conflict of Interest Act,’” said Conacher.

– 30 –

FOR MORE INFORMATION, CONTACT:
Duff Conacher, Co-founder of Democracy Watch
Tel: (613) 241-5179
Cell: 416-546-3443
[email protected]

Democracy Watch’s Democracy Watch’s Government Ethics Campaign and Stop Bad Government Appointments Campaign

Loopholes in the Act allow Trudeau, Morneau and other ministers and officials to profit from their decisions – and blind trusts are a sham as they all know what they put in their trusts, and they are allowed to choose and instruct the trustee

Democracy Watch’s court case challenges Ethics Commissioner’s “smokescreens” such as the one she set up for Morneau as illegal under the Conflict of Interest Act – also challenging Trudeau Cabinet re-appointing Ethics Commissioner last June

Loopholes must be closed to require selling investments or not taking part in any decision that directly or indirectly affects investments (as all federal public servants are required to do)

FOR IMMEDIATE RELEASE:
Tuesday, October 17, 2017

OTTAWA – Based on the article published yesterday in the Globe and Mail, Democracy Watch has concluded that federal Conflict of Interest and Ethics Commissioner Mary Dawson made decisions that allowed Liberal Finance Minister Bill Morneau to violate the Conflict of Interest Act by not either setting up a blind trust or selling his shares in his family’s company Morneau Shepell.

Subsection 27(1) of the Act requires Cabinet ministers, their staff, Cabinet appointees (including Deputy Ministers) and other senior government officials to either sell investments they control (such as shares in a family company) or place them in a blind trust. They are all required under subsection 26(1) to disclose a summary public statement within 120 days after they are elected that states whether they have sold or set up a blind trust for these investments, among other key details.

According to the Globe article, which quotes officials from Mr. Morneau’s office, Commissioner Dawson did not require him to set up a blind trust. According to Mr. Morneau’s February 14, 2017 public Summary Statement, he did not sell any of his investments. That means he owns investments which he controls, investments which are not in a blind trust, and that is a violation of subsection 27(1) of the Act.

Instead of requiring Minister Morneau to sell the shares or put them in a blind trust, Ethics Commissioner Dawson allowed him to set up what she calls a conflict of interest “screen” that, she claims, prevents him from taking part in discussions and decisions if he has a conflict of interest. In fact, the Ethics Commissioner’s screens are smokescreens that allow Cabinet ministers and others to take part in almost all discussions and decisions even if they have a financial interest and could profit from the decision.

Similar “screens” allow many other Cabinet ministers, ministerial staff and senior government officials to make decisions that affect their families, friends, and their own financial investments, which is why Democracy Watch has challenged the Ethics Commissioner’s smokescreens in court because they are illegal under the Act.

Democracy Watch has also filed a court case challenging the Ethics Commissioner for being in a conflict of interest because the Trudeau Cabinet’s re-appointed her last June to her third six-month interim term — so she is essentially currently serving at the pleasure of the Trudeau Cabinet.

Even if Minister Morneau put the shares in a blind trust, it would be a sham because he would still know that he owns the shares, and he is also allowed under subsection 27(4) to choose his trustee, and is allowed under subsection 27(5) to give them instructions concerning the investments in the trust.

“As she has many times in the past, Ethics Commissioner Mary Dawson has once again allowed a Cabinet minister to violate the federal ethics law,” said Duff Conacher, Co-founder of Democracy Watch. “The federal ethics law allows Finance Minister Morneau to set up a blind trust but that would be a sham because he would still know he owns the shares in Morneau Shepell, and the law also allows him to make decisions that he can profit from but to be ethical Minister Morneau must either sell the shares or not take part in any future decisions that affect the company directly or indirectly.”

“Democracy Watch believes the federal Ethics Commissioner’s so-called conflict of interest screens are illegal because they allow cabinet ministers, ministerial staff and senior government officials to avoid the clear legal requirement in the federal ethics law that says they must disclose details each time they remove themselves from any decision-making process due to their conflict of interest, and because the screens also allow them to keep secret whether they have actually removed themselves from any decision-making process,” said Conacher.

“The federal ethics law really should be called the ‘Almost Impossible to be in a Conflict of Interest Act’ because it allows the Prime Minister, Cabinet ministers, their staff and senior government officials to make decisions that affect the interests of their families, family businesses, friends and friends’ businesses, and also to profit from their own decisions,” said Conacher. “To have a democratic, ethical federal government, the law must be changed to require ministers, ministerial staff and senior government officials to avoid even the appearance of a conflict of interest, and to sell their investments that cause apparent conflicts, as all federal government employees are required to do.”

Because of a huge loophole in the Conflict of Interest Act, Cabinet ministers and other senior government officials are all allowed to participate in or make any decision that applies generally. Almost all decisions made by ministers, their staff, and appointed senior government officials (all of whom are covered by the Act) apply generally – so in fact they likely don’t have to abstain from participating in very many decision-making processes even when they have a direct conflict of interest.

Ethics Commissioner Dawson negligently refused since she was appointed in July 2007 to define the loophole — what is, and is not, a decision that applies generally? She finally did so somewhat in Minister Dominic LeBlanc’s July 2016 screen statement, writing that a general application decision is not “narrowly focused” but instead “affects the interests of a broad class of persons or entities” not just “a small group” and/or not with only one person or entity with a “dominant interest” in the matter being decided. Very unfortunately, she did not define “narrowly focused” or “small group” or “dominant interest” which means the loophole is still vague.

As well, loopholes in the Act allow ministers, their staff and appointed senior government officials to have investments in mutual funds that invest in businesses they deal with and make decisions that make the businesses money, and make themselves money. They are not required to sell these investments or put them in a so-called “blind trust” or even disclose publicly that they own them (NOTE: the loophole is in the Act’s section 20 definition of “exempt assets” that don’t have to be sold, including “(h) investments in open-ended mutual funds” that can include shares in businesses (only “controlled assets” have to be sold)). Putting an investment in a blind trust is also a charade because the public office holder still knows that they own whatever they put in the trust.

In stark contrast, all federal public servants, even those without any decision-making power, are required by Appendix B of the Treasury Board’s Policy on Conflict of Interest and Post-Employment to take “all possible steps to recognize, prevent, report, and resolve any real, apparent or potential conflicts of interest” and to sell assets that create even the appearance of a conflict of interest or make another arrangement to resolve the conflict created by the asset.

In addition to Dominic LeBlanc, the Ethics Commissioner has established either a blind trust or a conflict of interest screen for the following Cabinet ministers – all of whom are allowed to make “general application” decisions that directly affect the assets or interests listed in their trust or screen:

1. Prime Minister Justin Trudeau – so-called “blind” trust for 7664699 Canada Inc.;
2. Finance Minister Bill Morneau – so-called conflict of interest “screen” for Morneau Shepell Inc. or its subsidiaries, affiliates and associates;
3. Justice Minister Jody Wilson-Raybould – so-called conflict of interest “screen” for KaLoNa Group.

along with about 45 other federal Cabinet staff, advisors and appointed senior government officials, whose screen statements can been seen here, including Mary Jean McFall, Chief of Staff for Agriculture Minister Lawrence MacAulay (see article about her “screen” here).

– 30 –

FOR MORE INFORMATION, CONTACT:
Duff Conacher, Co-founder of Democracy Watch
Tel: (613) 241-5179
Cell: 416-546-3443
[email protected]

Democracy Watch’s Government Ethics Campaign

Loopholes in the Act allow Trudeau, Morneau and other ministers and officials to profit from their decisions – and blind trusts are a sham as they all know what they put in their trusts, and they are allowed to choose and instruct the trustee

Democracy Watch’s court case challenges Ethics Commissioner’s “smokescreens” such as the one she set up for Morneau as illegal under the Conflict of Interest Act – also challenging Trudeau Cabinet re-appointing Ethics Commissioner last June

Loopholes must be closed to require selling investments or not taking part in any decision that directly or indirectly affects investments (as all federal public servants are required to do)

FOR IMMEDIATE RELEASE:
Tuesday, October 17, 2017

OTTAWA – Based on the article published yesterday in the Globe and Mail, Democracy Watch has concluded that federal Conflict of Interest and Ethics Commissioner Mary Dawson made decisions that allowed Liberal Finance Minister Bill Morneau to violate the Conflict of Interest Act by not either setting up a blind trust or selling his shares in his family’s company Morneau Shepell.

Subsection 27(1) of the Act requires Cabinet ministers, their staff, Cabinet appointees (including Deputy Ministers) and other senior government officials to either sell investments they control (such as shares in a family company) or place them in a blind trust. They are all required under subsection 26(1) to disclose a summary public statement within 120 days after they are elected that states whether they have sold or set up a blind trust for these investments, among other key details.

According to the Globe article, which quotes officials from Mr. Morneau’s office, Commissioner Dawson did not require him to set up a blind trust. According to Mr. Morneau’s February 14, 2017 public Summary Statement, he did not sell any of his investments. That means he owns investments which he controls, investments which are not in a blind trust, and that is a violation of subsection 27(1) of the Act.

Instead of requiring Minister Morneau to sell the shares or put them in a blind trust, Ethics Commissioner Dawson allowed him to set up what she calls a conflict of interest “screen” that, she claims, prevents him from taking part in discussions and decisions if he has a conflict of interest. In fact, the Ethics Commissioner’s screens are smokescreens that allow Cabinet ministers and others to take part in almost all discussions and decisions even if they have a financial interest and could profit from the decision.

Similar “screens” allow many other Cabinet ministers, ministerial staff and senior government officials to make decisions that affect their families, friends, and their own financial investments, which is why Democracy Watch has challenged the Ethics Commissioner’s smokescreens in court because they are illegal under the Act.

Democracy Watch has also filed a court case challenging the Ethics Commissioner for being in a conflict of interest because the Trudeau Cabinet’s re-appointed her last June to her third six-month interim term — so she is essentially currently serving at the pleasure of the Trudeau Cabinet.

Even if Minister Morneau put the shares in a blind trust, it would be a sham because he would still know that he owns the shares, and he is also allowed under subsection 27(4) to choose his trustee, and is allowed under subsection 27(5) to give them instructions concerning the investments in the trust.

“As she has many times in the past, Ethics Commissioner Mary Dawson has once again allowed a Cabinet minister to violate the federal ethics law,” said Duff Conacher, Co-founder of Democracy Watch. “The federal ethics law allows Finance Minister Morneau to set up a blind trust but that would be a sham because he would still know he owns the shares in Morneau Shepell, and the law also allows him to make decisions that he can profit from but to be ethical Minister Morneau must either sell the shares or not take part in any future decisions that affect the company directly or indirectly.”

“Democracy Watch believes the federal Ethics Commissioner’s so-called conflict of interest screens are illegal because they allow cabinet ministers, ministerial staff and senior government officials to avoid the clear legal requirement in the federal ethics law that says they must disclose details each time they remove themselves from any decision-making process due to their conflict of interest, and because the screens also allow them to keep secret whether they have actually removed themselves from any decision-making process,” said Conacher.

“The federal ethics law really should be called the ‘Almost Impossible to be in a Conflict of Interest Act’ because it allows the Prime Minister, Cabinet ministers, their staff and senior government officials to make decisions that affect the interests of their families, family businesses, friends and friends’ businesses, and also to profit from their own decisions,” said Conacher. “To have a democratic, ethical federal government, the law must be changed to require ministers, ministerial staff and senior government officials to avoid even the appearance of a conflict of interest, and to sell their investments that cause apparent conflicts, as all federal government employees are required to do.”

Because of a huge loophole in the Conflict of Interest Act, Cabinet ministers and other senior government officials are all allowed to participate in or make any decision that applies generally. Almost all decisions made by ministers, their staff, and appointed senior government officials (all of whom are covered by the Act) apply generally – so in fact they likely don’t have to abstain from participating in very many decision-making processes even when they have a direct conflict of interest.

Ethics Commissioner Dawson negligently refused since she was appointed in July 2007 to define the loophole — what is, and is not, a decision that applies generally? She finally did so somewhat in Minister Dominic LeBlanc’s July 2016 screen statement, writing that a general application decision is not “narrowly focused” but instead “affects the interests of a broad class of persons or entities” not just “a small group” and/or not with only one person or entity with a “dominant interest” in the matter being decided. Very unfortunately, she did not define “narrowly focused” or “small group” or “dominant interest” which means the loophole is still vague.

As well, loopholes in the Act allow ministers, their staff and appointed senior government officials to have investments in mutual funds that invest in businesses they deal with and make decisions that make the businesses money, and make themselves money. They are not required to sell these investments or put them in a so-called “blind trust” or even disclose publicly that they own them (NOTE: the loophole is in the Act’s section 20 definition of “exempt assets” that don’t have to be sold, including “(h) investments in open-ended mutual funds” that can include shares in businesses (only “controlled assets” have to be sold)). Putting an investment in a blind trust is also a charade because the public office holder still knows that they own whatever they put in the trust.

In stark contrast, all federal public servants, even those without any decision-making power, are required by Appendix B of the Treasury Board’s Policy on Conflict of Interest and Post-Employment to take “all possible steps to recognize, prevent, report, and resolve any real, apparent or potential conflicts of interest” and to sell assets that create even the appearance of a conflict of interest or make another arrangement to resolve the conflict created by the asset.

In addition to Dominic LeBlanc, the Ethics Commissioner has established either a blind trust or a conflict of interest screen for the following Cabinet ministers – all of whom are allowed to make “general application” decisions that directly affect the assets or interests listed in their trust or screen:

1. Prime Minister Justin Trudeau – so-called “blind” trust for 7664699 Canada Inc.;
2. Finance Minister Bill Morneau – so-called conflict of interest “screen” for Morneau Shepell Inc. or its subsidiaries, affiliates and associates;
3. Justice Minister Jody Wilson-Raybould – so-called conflict of interest “screen” for KaLoNa Group.

along with about 45 other federal Cabinet staff, advisors and appointed senior government officials, whose screen statements can been seen here, including Mary Jean McFall, Chief of Staff for Agriculture Minister Lawrence MacAulay (see article about her “screen” here).

– 30 –

FOR MORE INFORMATION, CONTACT:
Duff Conacher, Co-founder of Democracy Watch
Tel: (613) 241-5179
Cell: 416-546-3443
[email protected]

Democracy Watch’s Government Ethics Campaign