By Andrea Hopkins
OTTAWA, Oct 18 (Reuters) - Canadian Prime Minister Justin
Trudeau defended his finance minister on Wednesday amid
criticism that Bill Morneau did not place his assets in a blind
trust, moving to dampen a growing controversy that threatens to
overshadow the government's agenda.
Questions about Morneau's potential conflict of interest
follow weeks of backlash over the finance minister's attempt to
reform small business taxes and have become a major stumbling
block for Trudeau's two-year-old Liberal government.
Morneau, the multimillionaire former chief executive officer
of human resources management firm Morneau Shepell Inc,
asked on Tuesday to meet with the federal ethics watchdog to
discuss his decision not to put his assets into a blind trust,
as Trudeau himself has done.
"The conflict of interest and ethics commissioner gave clear
advice to the minister of finance, which he followed, and which
he will continue to follow," Trudeau said in parliament,
declining to answer questions about when he knew Morneau had not
used a blind trust.
Morneau has said he sought the advice of Ethics Commissioner
Mary Dawson to avoid conflicts of interest.
The troubled tax reform and focus on Morneau's personal
wealth risk derailing the Liberal agenda just as the government
heads into the second half of its four-year mandate facing newly
elected opposition leaders.
While Morneau has been a relatively low-profile finance
minister, he has been the face of the government's plan to boost
infrastructure spending, a project expected to boost economic
growth and widely supported by financial market players.
Marc Chandler, global head of currency strategy at Brown
Brothers Harriman, said financial markets would be largely
unaffected if Morneau leaves his job, as long as he is replaced
by somebody with the same views and fiscal plans.
"If you were to tell me that the criticism of him is really
partly a veiled criticism of fiscal expansion strategy and that
his demise could trigger a change in fiscal policy, it would be
somewhat more important," Chandler said, adding markets are more
worried about the possible demise of NAFTA and future rate hikes
by the Bank of Canada than the tempest over Morneau.
Morneau is expected to provide a fall fiscal update soon,
possibly as early as next week, forecasting a gradual reduction
in the budget deficit from an estimated C$28.5 billion this
He denied rumours in September that he was unhappy in his
post, saying he has "enjoyed this job from day one," but his
rise from obscurity to the most scrutinized cabinet ministers
has happened fast.
"The problem is that to the extent people don't know much
about Bill Morneau, they are learning about him now, and it's
kind of all the wrong things," said Ipsos Public Affairs
pollster Darrell Bricker.
Bricker said the Liberal lead over the Conservatives has
been trimmed to just 3 or 4 percentage points in recent weeks, a
surprising tightening given Trudeau's personal popularity at
home and abroad. The next federal election is in 2019.
A Morneau spokesman declined on Tuesday to say whether the
minister holds any Morneau Shepell shares or what he did with
his assets and holdings to guard against conflict of interest.
According to public disclosure documents available through
the office of the Ethics Commissioner, Morneau is full or part
owner of two holding companies as well as several real estate
holding companies, and is party to a conflict of interest screen
to ensure he abstains from decisions related to his company.
(Additional reporting by Fergal Smith in Toronto; Editing by
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