Front Burner - Bill Morneau steps down as Canada’s Finance Minister

Episode Date: August 18, 2020

After days of speculation about a deepening rift between Finance Minister Bill Morneau and Prime Minister Justin Trudeau, Morneau resigned on Monday. CBC Power & Politics host Vassy Kapelos on why it might have happened, and what it could mean for the Trudeau government.

In the Dragon's Den, a simple pitch can lead to a life-changing connection. Watch new episodes of Dragon's Den free on CBC Gem. Brought to you in part by National Angel Capital Organization, empowering Canada's entrepreneurs through angel investment and industry connections. This is a CBC Podcast. Hi, I'm Josh Bloch. Last night, Finance Minister Bill Morneau called a snap press conference. As we move to the next phase of our fight against the pandemic and pave the road towards economic recovery, we must recognize that this process will take many years.

Within the hour, he'd resigned, both his cabinet position and his seat in Parliament. 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 member of Parliament for Toronto Centre. This after a much-speculated-on meeting with Prime Minister Justin Trudeau earlier in the day. So we called Vashi Kapelos, host of CBC's Power in Politics. This is FrontBurner. Hello, Vashi. Hi. So we're taping this Monday night, like 20 minutes before 7pm.

This alert goes out. The Finance Minister Bill Morneau is holding a Snap press conference. What did you think when you saw that? So I immediately thought he's resigning, and I'll tell you why. I spent the day essentially contacting everybody I could who worked in his office or who worked in the prime minister's office to try and figure out how this meeting between the two of them that was supposed to supposedly have taken place today, how it was going, whether there was going to be news out of it, whatever, et cetera, et cetera. whatever, et cetera, et cetera, zero responses. And like, not that I'm anyone special, but normally they write back and say,

oh, we'll get back to you in an hour or we can't or whatever. None of that. It was radio silence. My colleagues were kind of undergoing the same thing. So I knew something was going to happen. And then when I saw it was going to be him by himself delivering a press conference, I was pretty sure it was going to be a resignation.

Right. And lo and behold, he comes out, he resigns. Tell me about the reasons that he gave. So this is where it all gets, I think, from my perspective, fascinating. You know, the reasons that he set out, we can go over first and then we can get into kind of what might have been happening behind the scenes. He says, he comes out and he says, you know what, I walked into the prime minister's office today and I told him I'm not planning to run again. It's never been my plan to run for more than two federal election cycles. The person who should be finance minister, the appropriate,

that's the word he kept using, the appropriate person to be finance minister right now is not someone who's going to be leaving government. It's been a real privilege to have this job. But like any job, there's a time where you're the appropriate person in the role and the time where 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 will 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. And oh, by the way, I'm not going to give up public service. I'm actually going to run to be the Secretary General of the OECD, which is like an organization of countries that coordinate on the economy, on economic issues. So he's leaving to do that because he felt like, hey, I'm leaving politics, so I shouldn't be in this really important role. I'll be spending the next few weeks preparing for this bid.

We've always said that Canada and the world needs more Canadian leadership, not less. Right. It kind of felt like he didn't really pull back the curtain on what might have actually been going on behind the scenes here.

Zero curtain pulling. None happened whatsoever. My hopes weren't high, but, you know, there was not a lot of background info given out there. So let's talk about what, you know, there's obviously been a lot of reporting, a lot of leaks about some of the tension between Morneau and Prime Minister Justin Trudeau. So what do we know about some of the reasons that led up to this resignation? For sure. Well, it's been almost, I would say, a month of speculation, pretty specific speculation about whether or not Bill Morneau was going to resign. And I'll take you right to the beginning, which is the finance committee, the We Charity controversy. I think the last time you and I spoke was around the prime minister's testimony. The week before that, the finance minister testified, and he had this big revelation

in his opening remarks, in which he told MPs there that he took a trip with We Charity to go, you know, granted, he gives a lot of money, He is money and his family's money had built a school. They took this trip to go see the products of what they had donated, except for the trip was worth $41,000. And he realized he had never paid them back. And so he cut a check the morning of his appearance before the finance committee. I expected and always had intended to pay the full cost of these trips. And it was my responsibility to make sure that was done. Not doing so, even unknowingly, is not appropriate. I want to apologize for this error

on my part. Now, people that I know who work for the Prime Minister and even some of the MPs on that committee have told me, the Liberals, that they didn't know that until that day. Like, it was very quickly before he said it publicly, at least for the prime minister, that the prime minister found out and the MPs found out in the committee. Canadians will find it impossible to believe that this organization showered you with $41,000 worth of luxury and accommodations and that you didn't know about it we paid for your travel that has the apparent uh perception of attempting to buy political influence so that kind of set the stage i think for what we saw transpire over the next couple of weeks which ended up being these series of leaks to various outlets that kind of decided to characterize the relationship between the

finance minister and the prime minister as faltering, kind of like a deepening rift ever since that. But instead of focusing on those issues, like the ethics issues or the controversy around that, it was all about, well, they're not on the same page when it comes to the economic recovery or the size of the deficit or the green plan and how much we should spend on it going forward. So those issues, look, I'll be honest, I had never heard in a punctuated way prior to last week that there were these deep rifts between the finance minister and prime minister, nothing out of the ordinary. So I think clearly there was something at play, something at work between the two camps and there were leaks

and there was a narrative getting put out there. But it all started really, I think, to be honest with what happened before the Finance Committee around the stuff. I want to go back for a second. I mean, Bill Morneau came from the business world. He was this Bay Street guy. Can you just remind us a little bit more of who he is and his political reputation coming into this position as finance minister? Yeah, I think it's a good question. And it's kind of really important to understanding why this is a pretty significant day. I think it's significant for the government. So Bill Morneau ran in a pretty safe riding in downtown Toronto.

He won with a big chunk of the vote. He left a very lucrative career. Like if you hear the name Morneau, you might not know who the finance minister is, but I'm pretty sure the company you work for gets their pensions through Morneau Chappelle, right? It's a huge company. His family is an incredibly wealthy one. His wife's family, the McCain family is also very wealthy. So he knows Bay Street well, he knows business very well, and he had a very big name in the business world in Canada. So he left that, joined the Liberals at a time when, if we think back to late 2014, early 2015, the Liberals were in third place. Justin Trudeau was pulling well behind Thomas Mulcair, if you could think back to that. So there wasn't it wasn't like they were the next government in waiting. He definitely believed in a lot of what the now Prime Minister Justin Trudeau was talking about at the time and the liberals were putting forward. And he decided to leave that very lucrative

life and career and head into politics. I think that it's important to know that because that sort of juxtaposition, that characterization really did inform both his successes and his failures in the role of finance minister. He was still well regarded among the business community for the most part in Bay Street. It gave the government, this government specifically, a lot of credibility in areas that they might be vulnerable in. At the same time, his political acumen or know-how certainly was a vulnerability for him, and at times for the government through all of this. Like, to give you just a practical example, if I were, you know, running for politics and I took a $41,000 trip to an organization that my daughter then worked for, whom then I gave a big government contract to, I would probably go, oh, maybe I shouldn't do that. Like, why, you know, have I paid that money back? Did I do, you know, did I cross my T's and dot

my I's? Like, those things would probably occur to you and I, especially if you were in politics, right, where you know perception is everything and the opposition is scrutinizing you day in and day out. But for some reason, and this wasn't the first time, that didn't happen with Bill Morneau. And that's kind of a reflection of the lack of length of time that he's been in politics, I think, to a certain degree. And it ended up being part of, it looks like, his downfall. then free on CBC Gem. Brought to you in part by National Angel Capital Organization, empowering Canada's entrepreneurs through angel investment and industry connections. Hi, it's Ramit Sethi here. You may have seen my money show on Netflix. I've been talking about money for 20 years.

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To listen to this podcast, just search for Money for Couples. this podcast, just search for Money for Cops. Do we have a sense of whether in fact he was pushed out or resigned in this case? Well, I can tell you that I've been working the phone ever since I went off the air and this ended a little while ago and trying to get a sense of whether or not I mean, look, he was asked plain out, did the prime minister push you out? Did he make you quit, basically, which is, of course, hearkening back to lots of other political stories in this country and south of the border where you quote unquote resign, which really means that, you know, the president or the prime minister told you to. Can you clarify, were you asked by the prime minister to resign?

No. Tonda, this morning, I went to the Prime Minister and I tendered my resignation. Obviously, I'm looking forward to a next set of opportunities, and I'm keenly interested in how the Prime Minister will continue the work we've done together over these last five years. He was pretty adamant that no, the Prime Minister didn't ask him, and that certainly matches up with what we heard from the prime minister's office last week,

which was a statement that talked about the finance minister having the prime minister's full confidence. What it doesn't match up with is all that reporting that I was telling you about around these big policy differences that they have and how they're kind of not operating simpatico right now or for a while. Like if that stuff was leaked from camps that are close to the prime minister, it becomes hard to think this is as altruistic as it was conveyed during the press conference with the finance minister, rather the former finance minister, I should say, right? Like it just doesn't, something in your gut goes, really, this was just about you wanting to move on in the middle of a pandemic when you hold probably the most important portfolio? Or was this about something

more that transpired over the last few weeks? There has to be a bit of each there. Well, I think some Ottawa types especially were interested that this news came out that Trudeau had brought former Bank of Canada and Bank of England Governor Mark Carney on as this informal advisor. Yeah. And here's this other I was thinking today, like last week when this came out, I was on vacation, but I was reading all of this stuff and I read all the statements from the prime minister's office. It was really downplayed, right? It's like, yeah, he's here. He's kind of going to help us in this minor advisory role. It's not a big deal. Now, today, as I'm seeing all this transpire with the finance minister, I think back and I'm like, oh, that was actually a pretty big deal, right? Because Mark Curdy is of a certain stature. He knows a lot about the economy, clearly. And there has been speculation for years that he would not only be a prominent liberal or a prominent minister, but could in fact at one day perhaps even replace the prime minister. Like he

would be a real kind of coup or catch for the liberals. So the fact that in the midst of all these leaks about tensions between the finance minister and the prime minister, in swoops Mark Kearney to do some advising on the side. Like it's, it's now I look back and I'm like, wait a second, Massey, you should have picked up on this.

Right. Probably a bigger deal. Like it just, again, it's that feeling of like, this doesn't all add up. How likely do you think it is that he may in fact replace Morneau in this position?

So that's a great question. And I think that's where the speculation heads at this point, right? Like what happens now? Is there a cabinet shuffle? Is Mark Carney sort of parachuted in? You don't have to be a sitting MP to be a cabinet minister. It's conventional that that is the case. Most of the time it is, but it's not unheard of that you don't have to be. So it's certainly an option. I don't know how likely an option it is. I mean, yes, he has obviously the resume for it. But I think at the same time, you know, I think a lot of liberals so far who I've heard from tonight are interested in the

prime minister picking a woman, for example, or maybe looking within cabinet. There's always the possibility of Chrystia Freeland, her name gets floated around any time there's something high profile or a high profile position becomes available. So I think it's so hard to judge right now and maybe in a few hours we'll have some more clarity because things seem to change pretty fast but I just don't know if it's, I don't think it's necessarily a slam dunk for him despite his resume and despite clearly the positive relationship he has with the prime minister.

I'm curious to know what this means for Trudeau and for the Liberal Party. I mean, losing a finance minister like this finance minister in the middle of the biggest economic crisis in my lifetime, at least. What kind of message does that send? being part of the We Charity controversy and kind of moving on from that or trying to move on from it and turn the page. This might, in fact, help the government do that. This has been, you know, Bill Morneau's actions throughout this have been a focus of the opposition parties. They're the ones who initially right off the bat started calling for the minister to resign. And so in a way, like, does this take away a bit of the oxygen from that some of the fuel for the criticism of the prime minister around that? Probably it does. On the other hand, you know, as you sort of really excellently laid out,

this is also the biggest financial crisis slash response slash recovery in my lifetime. For a finance minister to leave in the middle of all of that, certainly presents, I think, maybe a challenge and possibly an opportunity for the government, right? I think insofar as there's a challenge, look, any kind of upheaval in the middle of all this or uncertainty is maybe not the best thing for all parties involved at the same time if in fact the government is as as sort of we have been hearing in ottawa planning to reset in the fall and uh you know maybe do a throne speech or maybe prorogue for a bit or some some sort of thing something that signifies a bit of a shift this is one way to help amplify that impression, right?

And so if the next phase of this is the recovery and this leads them to an eventual election, maybe early next year, then maybe you want to get this kind of stuff out of the way so you can put yourself on better footing going into that period. I can't predict which of these scenarios kind of plays out, because I think it depends on who they pick next and what they do with the file and what

that recovery, if hopefully there is one, ends up looking like. But I do think there, you know, there are challenges and opportunities within it all. Vashie, thank you so much for speaking with me. And I know we'll be speaking to you soon on Monday's show about the new leader of the Conservative Party. Can't get rid of me. Looking forward to it. That's all for today. Thanks, go to cbc.ca slash podcasts.