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Explained: As Canada’s finance minister steps down, the conflict of interest scandal enveloping him and Trudeau

Officially, Bill Morneau said he was stepping down because he did not want to contest the next election, and that his successor ought to have a “long term perspective”.




Canada’s Deputy Prime Minister Chrystia Freeland on Tuesday (August 18) took charge of the country’s finance portfolio, a day after the sudden resignation of Bill Morneau, its holder of almost five years, over what was reported to be his strained relationship with Prime Minister Justin Trudeau.

Although publicly, Morneau said that he was stepping down because he did not want to contest the next election (in 2025), and that his successor ought to have a “long term perspective”, analysts questioned his decision to leave the critical ministry at a time when Canada is reeling under the economic crisis caused due to Covid-19.

Morneau also said he would now seek to be the next secretary general of the Organisation for Economic Co-operation and Development (OECD), a bid Trudeau supports.

While reports claimed that Trudeau and Morneau bickered over policy decisions, critics of the pair alleged that Morneau’s departure was a direct consequence of the WE Charity conflict of interest scandal that has embroiled both leaders since June this year.

What is the WE Charity controversy?

In June, the Canadian government awarded the popular youth organisation WE Charity a no-bid contract to run a C$912 million emergency volunteer programme for students impacted by the Covid-19 economic crisis. Under the agreement, WE would have received up to C$43.5 million for managing the programme.

However, Trudeau and Morneau soon got into political trouble after it emerged that the charity had links to both their families, with critics asking why neither recused themselves from the cabinet discussion concerning the contract. In July, Canada’s Ethics Commissioner announced an investigation into the decision– the Prime Minister’s third probe in as many years.

Morneau and his wife have made large donations to WE Charity, and his daughter works in an administrative position there. In Trudeau’s case, his mother Margaret and brother Alexandre earned over C$280,000 speaking at WE events over the past five years.

Trudeau fended off criticism by saying that the charity had been vetted and selected by Canada’s bureaucracy, and that his discretion in the matter only extended to approving or rejecting the entire proposal.

Both Morneau and Trudeau have since apologised for not recusing themselves, and the Canadian government cancelled the contract in the face of public anger. The WE Charity said it would return all the money; on August 12, it said that it had returned C$22 million to the Canadian government from the C$30 million it had received, The Star reported.

Consequences for Trudeau

Experts believe that although there might not be enough evidence to hold Trudeau responsible for financial wrongdoing, the scandal may cause the Canadian leader to suffer politically.

Trudeau’s decision on Tuesday to prorogue or suspend Canada’s parliament until September 23– generally a standard practice – has also invited ire, as committees probing the WE scandal would not be able to sit.

Although Trudeau has been generally praised for his handling of the pandemic, an ethics scandal in the middle of an emergency has energised the Opposition.

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Trudeau’s Liberal party, which lacks a majority in Canada’s parliament, has been accused by the main Conservative Opposition of scapegoating Morneau.

The New Democratic Party, whose support is considered pivotal for the minority Liberal government, has also lashed out at Trudeau. Its leader Jagmeet Singh said, “In the middle of a financial crisis, Justin Trudeau has lost his finance minister. Every time he gets caught breaking ethics laws, he makes someone else take the heat. That’s not leadership.”

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