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Thursday, July 07, 2022

Explained: Why a clean chit in WE Charity scandal is good news for Trudeau

The WE Charity scandal, which broke in June when Canada was recovering from its first Covid-19 wave, led to the third ethics probe into Justin Trudeau since his taking office in 2015.

By: Explained Desk | New Delhi |
Updated: May 15, 2021 10:02:27 am
Canadian Prime Minister Justin Trudeau. (AP)

Canada’s federal Ethics Commissioner Thursday said Prime Minister Justin Trudeau, last year, had not given preferential treatment while awarding a no-bid contract to a high-profile youth organisation that had ties to his family.

The WE Charity scandal, which broke in June when Canada was recovering from its first Covid-19 wave, led to the third ethics probe into Trudeau since his taking office in 2015, hurting his Liberal Party’s image less than a year after it lost its parliamentary majority in general elections.

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Later in August last year, then Finance minister Bill Morneau, who also had family links with the charity, abruptly resigned amid the pandemic over reportedly strained ties with Trudeau, further escalating the national outrage and energising political opponents.

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Thursday’s clearance from the ethics watchdog is welcome news for Trudeau, who is said to be planning another election this year to regain his party’s majority.

Morneau, however, has been found to have broken conflict of interest laws by “improperly furthering WE’s private interests, by failing to recuse himself from decisions relating to WE, and by giving WE preferential treatment”– a pronouncement that the opposition parties will most certainly use to attack the Liberals.

What is the WE Charity scandal?

In June last year, 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.

Trudeau and Morneau, however, soon got into 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.

It was reported that Trudeau’s wife, mother and brother had received large sums of money in the past to appear at WE Charity events, and Morneau had failed to reimburse trips to Kenya and Ecuador that had been paid by WE. Morneau and his wife had also made large donations to WE, and his daughter had worked in an administrative position there.

In July last year, Canada’s Ethics Commissioner announced an investigation into the decision – the Prime Minister’s third probe since taking office.

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

Although both, Morneau and Trudeau, denied any wrongdoing, they apologised for not recusing themselves, and the Canadian government cancelled the contract in the face of public anger.

What has the Ethics Commissioner said?

About Trudeau, Ethics Commissioner Mario Dion said although there was an “appearance” of conflict of interest due to his family connections to the charity, the Prime Minister had not broken the law.

The report found no personal friendship between Trudeau and the charity’s founders, but said awarding the contract gave “rise to a strong appearance of conflict between the Trudeau family’s relationship with WE and Mr. Trudeau’s duty to make decisions that best serve the public interest.” The report also noted that government funding to WE went up five-fold from C$1.1 million to C$5.5 million since Trudeau’s Liberals unseated the Conservatives, now the main Opposition party.

Finally, though, Dion said, “I determined that without an actual conflict of interest or a clear legislative prohibition against apparent conflicts of interest, I could not conclude that a contravention occurred”.

In Morneau’s case, the ethics watchdog had in October last year absolved him of wrongdoing as regards his foreign trips, accepting that it appeared to be a genuine mistake.

Yet in his report on Thursday, the ethics commissioner blamed Morneau of placing himself in conflict of interest “on several occasions”, and that his friendship with the charity’s founder afforded it “unfettered access to the Office of the Minister of Finance”. The report concluded that Morneau had breached three sections of Canada’s Conflict of Interest Act.

The findings, however, do not carry any financial or legal consequences for Morneau, since penalties under the Act do not apply the sections that the former minister is found to have breached, The Globe and Mail reported.

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What have been the reactions to the findings?

In a statement, Trudeau said the report “confirms what I have been saying from the beginning.”

“At the heart of this initiative was getting support for youth during this pandemic as fast as possible.”

Morneau said, “As the report confirms, the decision to have WE Charity administer the program was entirely based on the advice of the public service. As I have already stated, in retrospect, I should have recused myself from the discussion”.

Conservative Party leader Erin O’Toole demanded reforms in Canada’s accountability laws, saying, “The system is broken. We need to close the loopholes and we need to send a signal that the Prime Minister should lead by example, with ethical and moral clarity [and] not constantly be under investigation.”

Charlie Angus, an opposition parliamentarian from the New Democratic Party and ethics committee member, said, “I think the Ethics Commissioner has given a damning indictment of how the Liberals do business”.

“This is the picture as clear as can be of how friends of the government get absolute, unfettered, insider access in ways that are completely inappropriate. It’s a damning indictment of how this program went way off the rails so quickly.”

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