OTTAWA — The federal ethics commissioner has cleared Finance Minister Bill Morneau of allegations that he and his father benefited from insider information to save half a million dollars on the sale of shares in their family-built company.
Political opponents asked ethics commissioner Mary Dawson to look into the sales of millions of dollars worth of shares in Morneau Shepell Inc. in late 2015 by Morneau and his father — a sale that came just days before a major tax announcement that critics say triggered a dip in the stock market.
They argued that Morneau's December 2015 announcement raising income taxes on the highest earners had a wide-reaching market impact, because it encouraged wealthier shareholders to sell off some their stock before the changes came into effect on Jan. 1, 2016.
Earlier: House gets heated over timing of Morneau's sale
In a letter to Morneau, Dawson said no privileged information was used because the tax increase was first announced publicly as early as Nov. 4, 2015 — "well in advance" of the stock sale.
"With respect to the sale of Morneau Shepell Inc. shares in the fall of 2015, I am of the view that you did not benefit from insider information," Dawson wrote to Morneau in the letter, dated Jan. 5.
She referred to statements to the media made Nov. 4, 2015, by then-House leader Dominic LeBlanc, who said the tax measures would take effect on Jan. 1, 2016. Dawson also noted that the Liberals' 2015 election platform had promised to introduce the tax changes.
"This was well in advance of the sale of your Morneau Shepell Inc. shares on Nov. 30, 2015, and the tabling of the Dec. 7, 2015, ways and means motion on this matter."
Morneau is 'pleased,' aide says
In a separate review, Dawson also cleared Morneau of allegations that he was involved in the Bank of Canada's renewal of its contract with Morneau Shepell to manage its employee pension plan. The Bank of Canada renewed its contract with the company for four years in February 2017.
"I am satisfied that, as minister of finance, you had no involvement in the Bank of Canada's decision of the renewal of the Morneau Shepell Inc. contract," she wrote.
A spokeswoman for Morneau said Monday that his office is "pleased with the outcome" of the commissioner's examination.
"The minister will continue to work with the office of the ethics commissioner to ensure he is in full compliance with the rules," Chloe Luciani-Girouard wrote in an email. "The minister has gone above and beyond the initial recommendations from the ethics commissioner by divesting all his family's holdings in his former company."
The ethics commissioner still has another formal examination underway related to Morneau's connection to Morneau Shepell.
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The review was launched amid conflict-of-interest allegations over proposed pension reform spearheaded by Morneau. Opponents say the legislation would have brought him personal financial benefit.
These were all among several high-profile controversies that battered Morneau in the second half of 2017.
In July, he enraged small-business owners by proposing tax-system changes. The ensuing uproar forced him to eventually back off elements of his plan.
He has also faced intense political pressure over how he handled his personal financial arrangements after coming to office. The questions have focused on his shares in Morneau Shepell, for which he was executive chairman until his election win.
In response to the controversy, he sold off the remainder of his holdings last fall in the pension management firm, which were worth about $21 million.
He promised to place his other substantial assets in a blind trust. Morneau donated to charity the difference between what the shares were worth at the time of the sale and their value in 2015 when he was first elected — estimated at about $5 million.