Poilievre says Carney's taking advantage of an ethics loophole. Is he right?
New Liberal leader and soon-to-be PM says he's gone above and beyond ethics rules
Prime minister-designate Mark Carney has responded to Conservative attacks over his financial holdings by taking steps to meet the conflict-of-interest rules for elected public office holders four months before he was required.
"Carney has now divested all assets, other than his personal real estate, into a blind trust," said a statement from the Carney team. "The signed blind trust document was sent to the ethics commissioner [Sunday evening]."
A spokesperson for Carney told CBC News in an email that the new Liberal leader "will also be filing all of the reports required by the ethics commissioner well in advance of what the act requires."
The commissioner's office confirmed to CBC News that it "has indeed been in touch with Mr. Carney's team," but that it "can't go into the details of what was discussed."
Carney made the move after Conservative Leader Pierre Poilievre accused Carney of putting himself in a position to hide and hold "millions of dollars in interests that go against" Canada and Canadians.
Poilievre said Carney is in a position to do that because he had found a "loophole" in the Conflict of Interest Act that allows him to hold off on divesting his assets until 120 days after becoming prime minister.
In fact, anyone could find the same 120 day "loophole" Poilievre is referring to by simply reading the Conflict of Interest Act Stephen Harper's Conservative government wrote and passed into law in 2006.
It states that people assuming public office have to submit a "confidential report" to the ethics commissioner detailing their financial holdings within 60 days of taking public office.
Then the act says that within 120 days after a person has assumed public office they have to divest themselves of their controlled assets.
What does divesting controlled assets mean?
While Carney will be the next prime minister, he has not yet assumed that role and so is not technically a public office holder for now.
Public office holders, as defined in the act, include the prime minister, cabinet ministers and parliamentary secretaries. All other MPs in the House of Commons, including the Opposition leader, are not subject to the act. They instead have to adhere to the conflict-of-interest code for MPs.
Other public office holders include the governor and deputy governor of the Bank of Canada, CEOs of Crown corporations, museum directors and other officials appointed across the government.
According to the Office of the Conflict of Interest and Ethics Commissioner, controlled assets are those "whose value could be directly or indirectly affected by government decisions or policy." Examples include publicly traded securities, commodities and stock options.
Once public office holders submit a report detailing their controlled assets, the commissioner rules on what assets need to be divested.
The public office holder then has two options for how they can divest their assets: they can sell them, or put them in a blind trust.
If the public office holder chooses to sell their controlled assets, they need to do so through an "arm's-length transaction," which means they cannot sell the assets to friends, family or business associates.
What is a blind trust?
Carney has decided to put his assets in a blind trust. That trust is then managed by a trustee who does not own Carney's assets but has all the legal authority required to manage and sell them.
Before Carney's trustee can be installed, the ethics commissioner must be satisfied that there is an arm's-length relationship between them.
Once approved, the trustee is restricted from seeking advice from Carney on how to manage the assets or the "nature or details of the trust assets."
The trustee can tell Carney the overall net worth of the assets, but they can't detail any transactions that have been made or might be made.
By March 31 every year, the trustee must file a written report to the ethics commissioner's office confirming how much the trust is worth, its income over the past year and the trustee's fees.
Once in a blind trust, the assets have to stay there until Carney is no longer in public office or the assets have been depleted.
How blind is it really?
Leonard Brooks, a professor specializing in accounting, ethical investing and corporate governance at the University of Toronto, told CBC News that blind trusts are a good tool — providing the parties involved behave ethically.
"There is a concern that people who make the laws, or enforce regulations, are susceptible to doing what they do in a way that will help themselves or their friends," Brooks said. "A blind trust is a way to guard against that.
"It can work effectively, but it requires diligence, integrity and appropriate intent," he said. "There are people who go into public life that have integrity, and there are others that don't."
The ethics commissioner can launch investigations if they suspect that the trustee is colluding with the asset's owners for the purposes of financial benefit.
This system, Brooks says, comes down to governance by the commissioner. But he said it's better to rely on governance than require someone to sell all their assets — provided "the conditions of a blind trust, and the intention to use it, are developed with integrity."
Conservatives propose legal change
Poilievre says if he is elected prime minister, he will amend the Conflict of Interest Act to require party leadership candidates to meet the standard for public office holders within 30 days of becoming a candidate, and publish their controlled assets publicly within 60 days.
A spokesperson for Poilievre told CBC News that the Conservatives want to change the law to include leadership candidates because Carney's swift rise to the prime minister's office has not made him subject to the code of conduct for sitting MPs, which also requires financial disclosures.
Michael Barrett, the Conservative ethics critic, says Canadians remain "blind" to Carney's assets and he wants that changed.
"Mark Carney needs to immediately make his assets and conflicts of interest public so Canadians can judge for themselves," he said.
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