By Canadian Press

Morneau admits communication over contentious tax changes could’ve been clearer

Dec 21, 2017 | 2:15 AM

OTTAWA — Bill Morneau is staying put as finance minister — but he admits he’s closing out his tumultuous year with some regrets.

Morneau enters the holiday season after being battered for months by controversy over a highly contentious tax-reform plan, stinging ethical questions over how he arranged his personal assets upon entering cabinet and conflict-of-interest allegations.

Looking back, he said in an interview that, perhaps, he could have done more to avoid at least some of the flak linked to his proposed tax changes for small businesses.

“Obviously, I don’t have the ability to change how we did things,” Morneau told The Canadian Press, referring to a suite of tax proposals he later scaled back in response to waves of angry complaints from entrepreneurs, doctors, tax specialists and fellow Liberal MPs.

“Reflecting on how we communicated the tax changes, my sense is that there’s two things that we could have done differently… We could have articulated more clearly for Canadians how these changes were going to advantage the overall economy and Canadian families,” he said.

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“I think people needed to understand that earlier on and that would have been helpful. I also think that we could have been more assertive in explaining our point of view earlier and that would have allowed us to give Canadians confidence that what we were trying to achieve was in their benefit.”

Morneau has insisted from the start that the tax changes were designed to eliminate unfair advantages for the wealthy.

But after critics warned the proposals could hurt middle-class business owners the Trudeau government has repeatedly promised to help, he eventually made adjustments and backed away from some elements of the plan.

Morneau’s challenges over the past six months have extended beyond the government’s tax proposals — and the focus has gradually shifted to him.

The controversies have forced Morneau to navigate ethical questions over how he handled his substantial assets after entering office. He’s also denied conflict-of-interest accusations related to proposed pension-reform legislation, which has prompted a formal examination by the federal ethics commissioner.

He was confronted with intense criticism over the fact he hadn’t placed his significant holdings in Morneau Shepell — the firm he built with his father — into a blind trust after being named to cabinet. Morneau’s decision not to use a blind trust was based on the ethics commissioner’s advice.

In response to the controversy that dominated debates in the House of Commons, Morneau sold off the remainder of his Morneau Shepell shares, which were worth about $21 million. He 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 — an estimated $5 million.

And he vowed to put his other assets into a blind trust.

The conflict-of-interest allegations came next and were connected to a pension reform bill that he spearheaded. Rivals have alleged the legislation would benefit Morneau Shepell, which manages pensions. 

On these matters, which Morneau described as “personal,” the former businessman argued he basically did everything he could.

“In terms of the personal issues, I don’t think that there’s anything that I could have done differently,” he said.

“I also recognize that when people have a perception of some potential for conflict, it’s really important to take action and that’s why I did take action. It was something that I considered to be critical for me that I continued to have the continuing privilege of doing this job.”

From this experience, Morneau said he believes he’s being asked to meet new standards for someone in his position.

“I think now I’m in a place where we’ve seen that the standards that people expect someone in my position to have may have been updated,” he said.

Throughout the fall, opposition parties kept the pressure on Morneau and eventually Conservative Leader Andrew Scheer called for his resignation — or for Prime Minister Justin Trudeau to fire him. Trudeau has defended his finance minister. 

When asked if there was ever any internal talk about shuffling him out of his finance portfolio, Morneau said: “No.”

Ever have any second thoughts about entering politics? “No.”

Morneau added that he feels he has strong support from the Liberal caucus. Last fall, some Liberal backbenchers openly criticized the tax-reform plan, while others grumbled privately about how it was communicated.

“We’ve had a series of meetings over the last couple of months that have been positive,” he said.

“I saw, when we announced where we were actually going with these changes, a good level of support and a sense of complete understanding that this was what we’ve been trying to do all along.”

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Andy Blatchford, The Canadian Press