Karl Nerenberg
writes about Bill Morneau's conflicts of interest - with particular attention to the NDP's justified criticism of legislation aimed at privatizing pension management to benefit forms like Morneau's.
The subject, in this case, is pensions, federally regulated pensions to be precise. The finance minister is the sponsor of the now notorious Bill C-27, which would allow federal agencies and crown corporations, such as the CBC and Canada Post, to set up a new kind of pension system for their employees.
In place of guaranteed regular, and often inflation-adjusted payments to retirees, based on years of service and cumulative contributions, federal entities would now be allowed to set up what are called targeted benefit pensions. These are hybrid plans, somewhere between the current plans and defined contribution plans, which are, in essence, glorified retirement savings plans.
Defined contribution plans give employees zero guarantees as to how much they will receive once they retire. They only know how much they must contribute while they work.
Targeted benefit plans would provide a measure of assurance to retirees that they would receive a certain level of pension payout.
But their pensions would not be 100 per cent guaranteed. Payouts could vary, depending on investment performance and the employer's financial situation.
A transition to such a system would be a bonanza for private-sector companies such as Morneau Shepell. The finance minister's former company specializes in managing pension and benefit plans. Targeted benefit plans are complicated affairs and would require high-level expertise. Morneau Shepell has that expertise.
For the federal government, the targeted benefit idea is not new. In 2014, the Harper government held consultations on targeted benefit plans, but never got around to presenting legislation to make them happen. At the time, Morneau Shepell was an enthusiastic booster of this new sort of pension scheme.
In a letter accompanying a submission to the Conservative government's associate minister of finance, Kevin Sorenson, two senior Morneau Shepell people said: "We believe that targeted benefit plans represent an important step forward in the evolution of pension-plan design and we want to ensure that they are implemented as effectively as possible."
A careful reading of Morneau Shepell's
submission shows that the company fully understands the purpose of this new kind of pension plan. It is, at bottom, to weaken employers' obligations and push more risk onto employees and pensioners.
In Morneau Shepell's words: "The sponsor [i.e. the employer/company/agency] and employees share risks, which could include adjustments to both contributions and benefits,
the latter which affect employees only [emphasis added]"
In the House on Monday, both opposition parties focused on the fact that Ethics Commissioner Mary Dawson has opened an investigation into Morneau. Dawson is concerned that at the time he drafted and presented Bill C-27, the finance minister had not divested himself of shares in his company -- a company that openly favours, and could handsomely profit from, the goals of the legislation.
The NDP's Nathan Cullen put it this way:
"Bill C-27 is not only a clear attack on workers' pensions, it is also a massive conflict of interest… The Ethics Commissioner is speaking about it. She has launched an official investigation into this minister and this bill. Therefore, will the Prime Minister maybe update his hear no evil, see no evil, speak no evil ethics code?"
Neither the prime minister nor the finance minister would engage on the substance of the matter. They kept repeating the mantra that they respect non-partisan officers of parliament, such as the ethics commissioner. They pledge to, in the prime minister's words, "work with her."
The finance minister was particularly hapless during Monday's grilling. He could do nothing more than assert, repeatedly, that he cares about Canadian workers and retirees, and reaffirm that he has, belatedly, sold all of his shares in Morneau Shepell.
His response to Conservative MP Candice Bergen was typical.
"I will continue to work to assure Canadians can retire in dignity. I will continue to work with the Ethics Commissioner to make sure that her examination is complete. Now that I have sold all my Morneau Shepell shares and made a large donation to charity, I am looking forward to continuing these efforts on behalf of Canadians."
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Bill Morneau
