There is never a good time to lose your finance chief – but the timing couldn’t be worse for the embattled Canadian Prime Minister Justin Trudeau.
Canada’s Finance Minister Bill Morneau tendered his resignation Monday amid an ethics scandal tied to a well-known and well-connected charity. The allegations involve a free trip and favoritism, and have entangled the Prime Minister himself.
Morneau’s successor, deputy prime minister Chrystia Freeland, will become Canada’s first female finance minister and must now grapple with a struggling economy, buffeted by a global pandemic.
With Morneau’s resignation and Freeland’s appointment, there is no doubt the Trudeau government is trying to regain its footing. The Prime Minister also announced that the current parliament session will end, which means that ethics inquiries currently at committee won’t be able to resume hearings until the fall.
Opposition leaders say Trudeau is risking the country’s pandemic recovery with his cabinet changes, and attempting to distract from the scandal.
“At a time when Canadians are worried about their health and their finances, Justin Trudeau’s government is so consumed by scandal that Trudeau has amputated his right hand to try and save himself,” said Conservative Party leader Andrew Scheer in a tweet Monday evening.
“This changes nothing, and to blame the finance minister for what is completely the responsibility of the prime minister is wrong,” said Jagmeet Singh, head of Canada’s New Democratic Party, at a press conference Tuesday.
“And it seems like the liberal government is more interested in throwing the finance minister under the bus than the prime minister taking responsibility for his own breaches of the conflict-of-interest laws and his own breaches when it comes to scandals,” Singh said.
He added that although his party wasn’t yet trying to bring down the Trudeau government, it could be an option in the coming months. Trudeau’s government is in a minority position in parliament and needs the support of other political parties in order to stay in power.
The scandal revolves around the WE charity, which is involved in international development as well as activities in Canada. Trudeau is facing opposition-led inquiries over his family’s links to the charity and whether WE was favored when it was granted a multi-million contract for a Covid-19 relief program. The contract has since been canceled.
Trudeau’s wife, brother and mother have all received either speaking fees or been reimbursed for travel expenses while attending events for the charity. Opposition parties say the prime minister should have recused himself from making a decision on granting WE the contract and declared his conflict of interest. Trudeau has said that he will wait for the results of the ethics investigation.
For his part, Morneau revealed a few weeks ago that he did not repay more than $30,000 in travel expenses covered for him and his family by the WE Charity. During committee testimony in July, Morneau said he wrote a check that day to cover the private trips they took to Kenya and Ecuador in 2017 to tour WE projects. He described it as a personal “mistake.”
A pandemic recovery plan
In a press conference Tuesday, Trudeau insisted he wasn’t trying to sidestep a scandal but instead to refashion government policies for a pandemic recovery.
“We need to reset the approach of this government for a recovery to build back better and those are big, important decisions and we need to present that to parliament and gain the confidence of parliament to move forward on this ambitious plan,” Trudeau said.
The recent scandal has obscured what has been a generally successful strategy fighting the Covid-19 pandemic. For several weeks Canada has averaged about 400 cases daily, according to Johns Hopkins University.
And throughout the pandemic, a majority of Canadian workers affected by the financial crisis have been receiving about $1,500 a month in government relief.
Confidence in Canada’s financial recovery could now be at risk and some business leaders are warning Freeland to avoid political expediency and instead come up with a solid financial recovery plan.
“Resist the pressure that her colleagues and potentially her boss are putting on her in terms of the amount of free-wheeling spending, uncontained and unrestrained that may be on the way here,” said Goldy Hyder, president and CEO of the Business Council of Canada, in an interview with CNN Tuesday.
In a letter just drafted for Freeland, Hyder says he is asking the minister for a concrete economic recovery plan that doesn’t break the bank.
“That is lacking, that is our greatest concern today and it’s why we’re being very firm in calling for clear, fiscal anchors to be put in place, so we all know what we’re working toward,” he said.
However during the press conference, Trudeau seemed to indicate that the spending would continue given low interest rates and he promised he would not raise taxes.
“This is our chance to build a more resilient Canada, a Canada that is healthier and safer, greener and more competitive,” he said.