That the House agree with the Prime Minister’s statement in the House on November 1, 2017, that “sunshine is the best disinfectant”; and call on the Finance Minister to reveal all assets he has bought, sold or held within all his private companies or trust funds since he became Finance Minister, to determine if his financial interests have conflicted with his public duties.
He said: Mr. Speaker, we are called to this place to act in the public interest, to advantage the people we represent and not ourselves. No one has more power to advantage either himself or others than the Minister of Finance. He imposes taxation, tariffs, regulation, and subsidies. His department sells hundreds of billions of dollars of bonds on the market, which pay interest from Canadian taxpayers to lenders here and around the world. As the hon. member for Moose Jaw—Lake Centre—Lanigan, with whom I will be splitting my time, will point out later, those powers must always be carried out in the public interest.
There are two major dangers in allowing one man or woman to have so much financial power. The first is the danger of a conflict of interest, and the second is the misuse of privileged information. Let us begin with the first.
When any individual controls $330 billion of other people's money and regulates how businesses operate, then he or she can make decisions to favour companies or entities in which he or she has ownership. For example, the Minister of Finance was executive chairman of a billion-dollar pension administration company before he took his public duties. During that time, he advocated for a new hybrid model of pension called a “targeted benefit pension plan”. Those plans take from defined benefit plans and defined contribution plans, mix them together, and then provide people with a pension that has a benefit that is aspirational rather than locked in stone. In other words, the company would promise that it would try to deliver a certain benefit to future retirees who worked for the company, but acknowledge that market conditions may change, and therefore the benefit may also change with it.
These are highly technical, very specialized pension products, and very few companies offer them. I have had my research team scour the financial system and they have found that there are only three companies in Canada that have any specialization in offering these unique products. One of them is Morneau Shepell, the very company that the Minister of Finance helped create and for which he was the executive chairman. Up until only weeks ago, he had continuing interests of approximately $20 million in that very company. He then introduced a bill that would allow that company to provide these highly specialized financial products, or targeted benefit pension plans.
Let me be clear about the specificity as opposed to the generality of this particular initiative. Generally, he introduced a bill on pensions while owning shares in a pension company. Specifically, he introduced a unique financial product, which this company provides, through a bill in the House of Commons. Even more specifically, he used the unique model that exists only in New Brunswick as the prototype for the bill he would introduce here in the House of Commons.
Who helped unveil and design that model? It was Morneau Shepell. When? It was while the minister himself was the executive chairman of that very company. Therefore, this is not a matter of general application, but a matter of high specificity.
The law says that a minister of finance can advantage himself as long as he is advantaging everybody else at exactly the same time. When Jim Flaherty got a discount on a hockey stick at Canadian Tire, because he cut the GST, he was not in a conflict of interest, because anyone else could have saved two percentage points on a hockey stick, all 35 million Canadians.
This bill, by contrast, is so unique, so specialized and technical, that not only are there only about three companies in all of Canada that could provide the product created in the bill, but of those three, the one that had previously designed the product in question, and all the detailed contours of that product, was the minister's company, a company named after his family, a company in which his father is a board member, a company in which, until discovered, the minister himself held $20 million in shares. It is a highly specific, clear conflict of interest.
There is another issue, and that is the advanced use of privileged information. Ministers have the ability to make stock markets rise and fall, because they make announcements on regulation and taxation that influence and affect the markets. That is why we have to ensure that they do not make financial decisions of their own on buying and selling stocks, using that information before it is available to everyone else.
The basis of the free market system is that buyer and seller have at their disposal the same information so that neither has an unfair advantage over another. One might do a better job of researching or accessing that information, but as long as it is equally available, there is no problem. That is precisely why we have a tradition, a very carefully guarded tradition, that no market-moving information is to be introduced before the closing of the markets.
Typically, big announcements by government are made throughout the day, but not big market-moving announcements. They are made in the evening so that nobody can get the news, get online, and make a trade. That is how seriously we take the commitment that everyone in the marketplace is on the same, equal footing and that no one has an informational advantage over anyone else.
That informational advantage is not an academic question, because if the buyer knows more than the seller, or the seller knows more than the buyer, the person who has the advance knowledge is actually, in a strange way, robbing the person with whom he or she is carrying out the transaction.
If John knows more than Jim because of this privileged information, and John sells stocks to Jim on the basis of that privileged information, he may, for example, get a better price than he would have if Jim knew what was really going on, so Jim is shortchanged, because he has to pay more than he would have paid if he had had the same information as John. That is why John and Jim and Bill and everyone else should know exactly the same things when they agree to the voluntary exchange of securities in the stock market.
That latter danger, the danger of allowing some to have privileged information over the rest of the marketplace, has been an under-explored aspect of the finance minister's personal controversy, one we will explore in greater detail, and one way to explore it is by opening up his books.
The minister has a vast array of numbered companies and trust funds in which he has assets, which he has not revealed, that he held over two years while making important decisions that could enrich himself at everyone else's expense. If he has nothing to hide, he will stand today with us in the House and support the motion. He will tell Canadians everything he has owned, both personally and through these companies, so that all of us can judge his conduct and ensure that he has always acted in the public interest and not in his private interest.