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Freeland new finance minister following Morneau’s resignation

Tuesday, August 18, 2020 @ 3:44 PM | By Terry Davidson

Last Updated: Wednesday, August 19, 2020 @ 11:54 AM


Deputy Prime Minister Chrystia Freeland has been made Canada’s new finance minister, replacing an embattled Bill Morneau after he abruptly resigned amidst a conflict of interest scandal and a global economic crisis said to be the worst since the Great Depression.

The announcement came the afternoon of Aug. 18 following a day of rumblings that Freeland, now the country’s first female federal finance minister, would be moving into the role — a job sure to test her mettle as the country continues to wrestle with the economic downturn caused by the COVID-19 pandemic.

Former Finance Minister Bill Morneau

The move, which became official at a swearing-in ceremony at Ottawa’s Rideau Hall, was part of a small cabinet shuffle that included Liberal MP Dominic LeBlanc moving into Freeland’s now-former role of minister of intergovernmental affairs. (LeBlanc held that role once before but had to step away to receive cancer treatment.)

At a press conference after the swearing-in ceremony, Freeland praised Morneau for his time as finance minister.

“I’d like to start by saying how much I have been grateful to work with Bill Morneau and what a wonderful finance minister he has been for Canada,” said Freeland. “I worked very closely with Bill on issues like the NAFTA negotiation, like the 232 tariffs [and] most recently on the safe restart that we negotiated with the provinces and Bill truly has been a terrific colleague.”

Prime Minister Justin Trudeau was asked how he is going to respond to his new finance minister standing up to him when it comes to sticking to a budget on relief spending.

“I think over the past five years, in working with the finance minister in some extremely important decisions, we’ve demonstrated as a government that fiscal responsibility happens at the same time as we invest in Canadians. … In this COVID crisis, we made a decision, we made a pledge to Canadians that we will be there to help people who are struggling through this crisis.”

Freeland was asked to give a couple of examples of past instances where she disagreed with Trudeau.

“In terms of the times the prime minister and I have disagreed, it’s actually something we talked about [Aug. 17], and we reflected — I think with good humour — on a few of the issues where we have disagreed. I’m actually not going to catalogue those because, for me, always to be an effective minister, my motto has been to have open, candid conversations with the prime minister in private, but also to have a united front when we come out in public. And I want to thank the prime minister, who has treated me that way, too. That’s a really important part of any working relationship, particularly in government.”

Canadian Chamber of Commerce president and CEO Perrin Beatty said Freeland’s appointment “puts a strong hand on the tiller during an unprecedented economic storm.”

“In her previous ministerial roles, minister Freeland has demonstrated her grasp of complex policy issues and her openness to new ideas. Those qualities will be a vital asset in her new job,” said Beatty in a statement. “This leadership transition comes as the country experiences the steepest decline in economic activity on record, and millions of Canadians and tens of thousands of businesses are relying on federal leadership to spur an economic recovery. Faced with a debt that now totals over $1.2 trillion and an economy that has sustained serious damage, it is clear that Canada cannot regulate and spend its way to prosperity.”

Late on Aug. 17, Morneau announced his resignation both as finance minister and Toronto Centre MP following weeks of controversy over his family’s involvement with WE Charity, an organization that had been tapped by the Liberal government to run a student volunteer grant program.

During a press conference that day, Morneau said he had met with Trudeau that day to hand in his resignation. Morneau said Canada met the COVID-19 pandemic “head-on,” and that while the government “didn’t get everything right,” the “cost of inaction would have been far greater.”  

Morneau said it was time for a new finance minister.

“As we move to the next phase in our fight against the pandemic, and pave the road toward economic recovery, we must recognize this process will take many years,” Morneau said. “It’s the right time for a new finance minister to deliver on that plan for the long and challenging road ahead. That’s why I’ll be stepping down as finance minister and as minister of Parliament for Toronto Centre. No matter what, I know that with this Liberal government, Canadians will be in good hands.”

But Morneau also said he hopes to continue to serve the public and will put his name forward to be the next secretary general for the Organisation for Economic Co-operation and Development (OECD).

“The prime minister has given me his full support in this quest,” he said.

The resignation also comes following reports of growing tension between Morneau and Trudeau involving disagreements over the scope of environmental initiatives.

During questions from reporters, Morneau insisted he was not asked by Trudeau to step down. When asked if he was pressured to quit, Morneau said he had not planned to run in the next election and that the federal government needs someone in it for the long haul.

He also said it had been a privilege to hold the position.   

“But like any job, there’s a time when you’re the appropriate person in the role and the time when you have to decide when you’re not the appropriate person in the role. Since I’m not running again, and since I expect that we’ll have a long and challenging recovery, I think it’s important that the prime minister has by his side a finance minister who has that longer-term vision, and so that’s what led me to conclude during this time period that it’s appropriate for me to step down.”

Earlier this summer, both Morneau and Trudeau became the targets of ethics investigations after it came to light they failed to recuse themselves from a cabinet decision to award a $900-million summer student grants contract to WE — even though both men had family members who had financially benefited from the organization.

The investigation into Morneau came following news reports that one of his daughters worked in the charity’s travel department.

Not long before this, an investigation was launched into Trudeau when it was discovered his mother and brother had been paid to speak at WE events during Trudeau’s time as PM, and that his wife had been hired to speak at an event in 2012, when Trudeau was an MP.

In July, Morneau found himself at the centre of yet another WE-related controversy when, during an appearance before the House of Commons finance committee, revealed he had just repaid WE Charity $41,366 in travel-related expenses for trips to Kenya and Ecuador his family had taken with the organization.

Trudeau released a statement saying he had accepted Morneau’s resignation but praised him for his near-five years as finance minister and his work on the government’s response to the economic crisis caused by the COVID-19 pandemic.

“I want to thank Bill for everything he has done to improve the quality of life of Canadians and make our country a better and fairer place to live,” said Trudeau. “I have counted on his leadership, advice and close friendship over the years and I look forward to that continuing well into the future. Bill, you have my deepest gratitude and I know you will continue making great contributions to our country and for Canadians in the years to come.”

Goldy Hyder, president and CEO of the Business Council of Canada, thanked Morneau “for his service to Canada … in extremely challenging circumstances.”

“Canada needs strong and steady leadership during these extraordinary times to help ensure a healthy and durable economic recovery. We look forward to continuing to work with the federal government on a plan to promote economic growth, create jobs and put Canada back on a path to fiscal sustainability.”

Hyder also wished Morneau well in his OECD bid.

If you have any information, story ideas or news tips for The Lawyer’s Daily, please contact Terry Davidson at t.davidson@lexisnexis.ca or call 905-415-5899.