Joe Oliver: Don’t blame Bill Morneau - blame his boss
By Joe Oliver
By all accounts, Bill Morneau is a decent man who got into politics for the right reasons. However, he’s had a brutal few weeks, with a spotlight on a badly bungled ‘Fair Tax Plan’, conspicuous double standards and his own flagrant conflicts of interest.
As Finance Minister, he has to answer for his actions. Still, that does not absolve the Prime Minister from responsibility for this high profile disaster. Let’s trace a half dozen of Trudeau’s footprints.
First, Morneau is the only person in Canadian history to be appointed federal Minister of Finance without prior political experience. None of Justin Trudeau’s predecessors took a chance with a political rookie for arguably the second most important position in government.
They presumably wanted to evaluate a candidate’s track record to see whether he had the capacity for the big job. Also, experience is enormously helpful in navigating the choppy ministerial, parliamentary and political waters. Trudeau would have done Morneau a big favour by letting him learn in a less demanding role for a few years before promoting him.
Second, since the Prime Minister held up a blind trust as the gold standard for dealing with conflicts, why didn’t he demand his Finance Minister use it, given the size and complexity of his many companies and assets? Mind you, a blind trust is not a perfect solution. Because Morneau would only suspect he still owned his Morneau Shepell shares, he might not be legally required to recuse himself from a potential conflict.
In any event, the ‘ethical screen’ should have triggered an alarm, which might have happened had the Privy Council Office been in charge, rather than the Minister’s Chief of Staff.
In the spirit and intent of the Conflict of Interest Act, and as a matter of common sense, controlling assets through a holding company doesn’t eliminate a financial conflict. The proper approach was to dispose of his shares right away, rather than wait for two years to sell them under pressure.
Third, it looked terrible when the PM publicly humiliated Morneau by initially preventing him from speaking at their press conference. It also reinforced an impression his Finance Minister had one foot on a banana peel and the other in the grave, which undermined confidence in the government.
A fourth collective mistake was to sprinkle tweaks to tax reform over a week, rather than announce them all at once. This drip drip tactic prolonged the agony, reminding people of its numerous flaws.
Fifth, Trudeau and Morneau falsely claimed the plan targeted only the top 1% and would not harm the middle class. Either they deliberately misled us or they did not understand the critical details of their own initiative, including who would be impacted and how severely.
These are the most basic issues decision makers must consider in any tax policy analysis. The now denuded initiative is an admission of significant mistakes in the original proposal, which the Prime Minister had vigorously defended in the indignant tone of a class warrior.
Finally, people will not soon forget the attempt to hike taxes on hardworking, self-employed, middle class Canadians whom the wealthy PM and his very rich Finance Minister berated for not paying their fair share, while the powerful pair conveniently exempted their own foreign companies and family trusts. It is frankly amazing they did not anticipate the widespread and intense hostility.
If Trudeau’s advisers urge him to throw Morneau under the bus, it would only be fair to acknowledge who else bears responsibility for this body blow to Liberal credibility, starting with the man on top.
Joe Oliver is the former federal minister of finance.