Prime Minister Mark Carney speaks in Ottawa on Thursday. Conservatives have scrutinized his blind trust and apparent use of tax havens at Brookfield Asset Management Inc., which he used to chair.Adrian Wyld/The Canadian Press
The House of Commons ethics committee has recommended that prime ministers should be required to sell their assets, rather than placing them in a blind trust, within two months of taking office, and should have to divest fully from tax havens.
A report published Thursday also suggests that the ethics commissioner should be able to impose a sliding scale of penalties on public office holders who breach ethics rules, tied to their level of authority and the seriousness of the breach.
The committee of MPs also recommends that the Conflict of Interest Act be updated to prohibit public office holders from investing in companies that use tax havens.
Liberal members of the Commons ethics committee dissented from the report, saying they could not support it “as adopted by the majority.” They said a number of the recommendations were not grounded in the weight of evidence heard and “appear to have been crafted with one individual in mind, rather than in pursuit of sound, durable public policy.”
Prime Minister Mark Carney previously chaired Brookfield Asset Management Inc. Last year, Radio-Canada reported that while at Brookfield, Mr. Carney co-chaired two investment funds worth about $25-billion registered in Bermuda, a tax haven.
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Mr. Carney has said the structure of the funds is designed to benefit the Canadian pension funds that invest in them. He said taxes are paid in Canada, because the “flow through” of the funds goes to Canadian entities who pay taxes properly.
The committee report was adopted at a time when the opposition parties still held a combined majority. After securing its majority, the Liberal government announced plans this week to change the House of Commons rules so that it has a majority in committees.
The ethics committee’s findings will be seen as targeting Mr. Carney, who has been under fire from Conservatives over his blind trust and Brookfield’s apparent use of tax havens.
Mr. Carney placed all of his financial assets, other than personal real estate, into a blind trust after taking office.
In a blind trust, an individual’s assets such as stocks and bonds are managed by an arm’s-length third party who makes trades, sales and purchases without the beneficiary’s knowledge while the trust is in place.
The committee heard from witnesses who said that blind trusts are not truly blind because the person who sets them up knows what was in there.
It suggested that a prime minister, rather than setting up a blind trust, should have to sell all controlled assets, including publicly traded securities. Controlled assets are defined under the Conflict of Interest Act as assets whose value could be directly or indirectly affected by government decisions or policy.