10/19/2017 12:27 EDT | Updated 10/19/2017 18:01 EDT

Bill Morneau To Establish Blind Trust, Divest Assets In Family Company

The finance minister has been under attack from opposition MPs.

Adrian Wyld/CP
Finance Minister Bill Morneau speaks with the media on Parliament Hill on Oct. 19, 2017.

OTTAWA — Finance Minister Bill Morneau says he will divest assets in his family company, Morneau Shepell, and establish a blind trust to avoid any perception of conflicts of interest.

"This is a way for me to assure Canadians, to the highest level of confidence, that there is no possibility of any conflicts of interest," he told reporters Thursday.

The finance minister was pushed to make the changes, he said, after his personal finances became a "real distraction." The opposition has accused Morneau of using his position to benefit his family's company and his own pocketbook, while announcing tax increases on farmers, accountants, doctors and lawyers.

Morneau is spearheading pension legislation that could benefit Morneau Shepell, the pension and benefit company his father started. Morneau said he does not agree at all with that view. But he had not placed his more than one million shares in the company into a blind trust — although many MPs believed he had and Morneau had actually suggested that he would.

Morneau said again Thursday that he followed Ethics Commissioner Mary Dawson's advice to the letter.

"I, perhaps, naively thought that, you know, in Canada, following the rules and respecting the recommendation of the ethics commissioner, respecting the recommendations of an officer of Parliament, would be what Canadians would expect, would meet up to Canadians high expectations.

"In fact, what we've seen over the last week is that I need to do more."

Morneau said it was important that people have absolute confidence in him as finance minister. He announced that he will place his Morneau Shepell shares into a blind trust, while a trustee works with the ethics commissioner to sell them, most likely on the stock market. "I want them to execute that as expeditiously as possible, but in an orderly manner."

In the meantime, he said, he will continue to work through "a conflict of interest screen" to ensure he is free of conflict.

I, perhaps, naively thought that, you know, in Canada, following the rules and respecting the recommendation of the ethics commissioner, respecting the recommendations of an officer of Parliament, would be what Canadians would expect.Bill Morneau

The rest of his assets will go into a blind trust, Morneau said.

The finance minister said he met with Dawson and a lawyer Thursday morning to start the process. He said he told them that he wanted to ensure that "neither me nor my family had any assets in Morneau Shepell."

Dawson told reporters on Tuesday that she had told Morneau he didn't have to put his assets in a blind trust, or sell them within 120 days as the law states, because he held the assets "indirectly" through numbered companies.

Duff Conacher of Democracy Watch questioned Dawson's distinction between "indirect" and "controlled" assets and noted Morneau himself described "owning the shares."

"You can't own the shares indirectly. It is not possible," Conacher told HuffPost Canada.

Lars Hagberg/CP
Finance Minister Bill Morneau speaks during a tax reform announcement in Erinsville, Ont., on Oct., 19, 2017.

The Conflict of Interest Act lists several types of share structures that let a public office holder retain control over what is in their portfolio.

"[If he] held them through some numbered company...," Conacher said, "that's still owning the shares and controlling them."

Morneau said Dawson told him that the blind trust wouldn't prevent his knowing what was in the blind trust and that a conflict of interest screen "would be a superior way" for him to avoid conflicts.

The screen was intended to ensure that Morneau abstain from any participation in any discussion or decisions that might involve the interests of Morneau Shepell.

'I worked with my father across the hall'

Speaking to reporters, the finance minister said he had spent 25 years building a business with his family. "I worked with my father across the hall, we went back and forth across the hall 50 times a day; it was a successful enterprise."

The business gave him the opportunity, he said, to consider other things he could do with his life.

"I decided that I could have the biggest possible impact by going into government, so my conclusion is [that], as much as I am proud of what I did in the past, what I really care about now is what I want to do in the future.... And if [this] is what I need to do in order to get that work done, that is OK with me."

Morneau declined to say whether he is concerned that he and his family will take a financial hit on the shares he now pledges to sell.

"I made a commitment ... to take on a role that is a big responsibility, an important responsibility for Canadians. And, you know, this is not unexpected, in the sense, that I always knew there would be days that would be more or less difficult."