Morneau's firm doing work for the feds

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(This news story originally appeared in the Toronto Sun)

By Candice Malcolm 

New details uncovered by the Toronto Sun show that Morneau Shepell — the firm founded by the father of Finance Minister Bill Morneau — has a contract with the Bank of Canada worth over $8 million.

A spokesman for the Bank of Canada confirmed this relationship in an email exchange with the Sun. “The Bank of Canada has had a pension and benefits service contract with Morneau Shepell since November 1, 2012,” said Louise Egan. “The contract covers administration services for the Bank’s Pension Plan and benefits program.”

When asked if any changes had been made to this contract since Morneau became Finance Minister, Bank of Canada confirmed that there had.

“The original contract granted a right to the Bank to extend the contract for four years,” said Egan. “The Bank opted to exercise this option on Feb. 27, 2017.”

While Morneau Shepell’s client list is not public, the company has created a website (available at bankofcanada.integratedportal.uat.morneaushepell.com) that allows employees of Bank of Canada to manage their pension and employee benefits.

“Welcome to Selection Centrale, the website where you can find personalized information about your benefits and pension as a Bank of Canada employee or retiree,” reads the site’s landing page.

The site displays the Bank of Canada logo and provides a login for Bank of Canada employees. It also shows a 2017 copyright for Morneau Shepell in the bottom right corner.

Morneau Shepell has created similar websites for large client companies, such as Scotiabank and Bombardier. This website appears to be a common tool used by Morneau Shepell to integrate clients.

Cathren Ronberg, Director, Corporate Communications said, “It’s not appropriate for Morneau Shepell to speak on behalf of another organization, whether or not that organization is a client.

“It’s best that you contact the Bank of Canada for an answer to your question,” Ronberg said. “What I can tell you is that regarding any contract with the federal government, these are always awarded through an open, transparent, competitive tendering process.”

This relationship raises further questions for Finance Minister Bill Morneau, who has millions of dollars of shares in Morneau Shepell and is responsible for the administration of Bank of Canada.

As minister of finance, Morneau has significant influence over the Bank of Canada.

He holds the entire share capital of the bank on behalf of Canada and appoints the members of Bank of Canada’s board of directors, which manages the day to day affairs of the bank.

Last week, media reports revealed that Morneau chose not to set up a blind trust to manage his holdings in Morneau Shepell.

That means that when the Bank of Canada made the decision to renew its contract with Morneau Shepell, Bill Morneau was still a beneficiary.

On Thursday, he announced his plans to eventually divest all shares in the family company and place his other assets in a blind trust.

Morneau has said he previously sought the advice of the ethics commissioner on this matter. The commissioner has since confirmed she advised him that his plan to hold his shares “indirectly” via a corporation he owned did not violate the Conflict of Interest Act.

Federal law and ethics guidelines prohibit a Canadian cabinet minister from personally profiting from his or her position within the government.

In order to ensure that owners of companies do not influence federal government contracts within the departments they control, politicians and political aides frequently set up blind trusts or ethical walls in their dealings.

In 2002, then Minister of National Defence Art Eggleton was forced to resign from cabinet over a $36,500 contract awarded to a company owned by his former girlfriend.

That same year, Federal Solicitor General Lawrence MacAulay resigned from cabinet because he was involved in awarding a $6.5 million contract to a college where his brother was employed as president. (Both Eggleton and MacAulay denied they had done anything wrong.)

The Conservatives continued to hammer Morneau on the issue Thursday following his press conference and the NDP has called for the ethics commissioner to look into...(READ MORE)