The Office of the Conflict of Interest and Ethics Commissioner has cleared finance minister Bill Morneau of a conflict of interest in his introduction of pensions Bill C-27. While the finance minister’s decisions have not technically been deemed illegal, the National Association of Federal Retirees believes the legislation’s introduction was in poor judgement.
Mr. Morneau introduced Bill C-27 in October 2016. The legislation would allow Crown corporations and federally-regulated employers to change good defined benefit pension plans into target benefit pension plans. It would also benefit pension consulting companies that administer and support these intricate plans, which require complex and frequent actuarial valuations.
“We need legislation enabling Target Benefit Plans and Shared Risk Plans in all Canadian jurisdictions,” said Morneau at the 2013 Public Policy Forum on Pensions, when he was executive chair of Morneau Shepell Inc., the firm started by Morneau’s father. At the time Bill C-27 was introduced, Mr. Morneau held just over one million shares in the company.
In June 2014, Morneau Shepell, one of the companies that would benefit from Bill C-27, submitted comments in support of creating legislation similar to what C-27 eventually became.
In 2015, Prime Minister Trudeau promised Federal Retirees that defined benefit pensions “which have already been paid for by employees and pensioners, should not be retroactively changed into [target benefit plans]”.
And yet Bill C-27 would permit exactly that.
Ethics Commissioner Mario Dion’s decision states that while Morneau Shepell Inc. could benefit financially from the introduction of Bill C-27, it would be as part of a broad class of individuals and entities, and a Member of Parliament is not considered to further his own private interests if it affects the Member as one of a broad class. Essentially – a Member of Parliament is not in conflict of interest if they benefit as part of a “general application”. Bill C-27, Dion says, did not focus narrowly on a class of companies and did not create a dominant and specific interest for Morneau Shepell Inc.
The decision means that Mr. Morneau, an experienced pension executive, could benefit from a pension bill he introduced himself, while owning a large stake in a pension company.
“At the end of the day, we’re focused on the policy, not the person, and the Ethics Commissioner’s finding closes this chapter,” says Federal Retirees president Jean-Guy Souliere. “But Canadians have been clear: Bill C-27 will hurt the retirement income security that’s already been earned by millions of of employees and retirees in defined benefit pension plans. It’s flawed and must be withdrawn. This is the perfect opportunity for Prime Minister Trudeau to honour the promise he made to Federal Retirees and pensioners in 2015, and for Minister Morneau to demonstrate his commitment to full, transparent and open consultation on retirement security, which he promised in the 2018 federal budget.”