OTTAWA – For the first time in nearly 100 years, a political newcomer is stepping into the high-stakes, pressure-cooker position of federal finance minister.
Multi-millionaire Toronto businessman Bill Morneau takes over the file at a critical time, as the economy struggles to rebound from the steep drop in the price of oil and other commodities.
Morneau, sworn in Wednesday as a key member of Justin Trudeau’s new Liberal cabinet, is the first political rookie to take on Finance since 1919, but he brings considerable experience from the business world.
Until a little over a week ago, he was executive chairman of Morneau Shepell, the country’s largest human resources consulting firm.
It didn’t take long before he got a taste of how his new job as a senior cabinet minister was about to change his life.
“We have literally just finished our first cabinet meeting, as you know, and all of us are looking forward to sitting down with our deputy ministers tomorrow in order to plan out what we’re doing next,” Morneau said Wednesday during a brief scrum on Parliament Hill.
He resigned from his post at Morneau Shepell following his election win, but his holdings in the firm will likely come under scrutiny now that he’s finance minister. Morneau still owns nearly a five per cent stake in the company, Canada’s largest administrator of pension plans.
Pension enhancement is just one of many economic campaign promises on which Trudeau’s Liberal government will now have to make good.
Indeed, Morneau – a member of Trudeau’s economic advisory group – will have a number of pressing files to juggle.
Trudeau has promised that his government’s first piece of legislation would be a tax cut for middle-income earners, to be paid for by making Canadians in higher brackets pay more. The Liberals aim to have the centrepiece measure in place rapidly – before the end of the year.
Morneau will also have to produce a budget, which he said might be preceded by a fiscal update.
Any refreshed fiscal numbers will have to account for a growth outlook that has dimmed since the last time the federal government’s projections were last made public.
The Liberals have also vowed to replace the Conservative government’s income-splitting program for families and axe its increase to the contribution limit on tax-free savings accounts.
The laundry list of promised economic changes would be imposing for any incoming finance minister, even a seasoned parliamentarian.
Morneau became the first political greenhorn to take the controls at Finance since Sir Henry Drayton assumed the role in August 1919.
In an interview with CBC late Wednesday, Morneau was asked about his lack of political experience.
He recalled how he built a business into a large Canadian enterprise, chaired an economic think tank and co-wrote a book on pensions.
“I think Canadians want to know… that the person who’s the finance minister has the history, has the experience and the judgment to make tough decisions when tough decisions come up,” he said.
“I’m lucky that I have some really great colleagues around the table who are going to assist me in that regard.”
William Robson, president of the C.D. Howe Institute think tank, said he expected someone with more experience to get the job.
But Robson believes Morneau, who served as C.D. Howe’s chairman until last year, is a good choice particularly because his background will reassure the business community.
One of the biggest challenges for Morneau, who has excellent people skills, will be keeping Trudeau’s promised deficits from ballooning out of control, Robson added.
He said Morneau will likely be forced to say “no” to many groups and provinces that will pressure him to crack open the public purse.
The Liberals pledged to run shortfalls of no more than $10 billion in each of the next three years before returning it to balance. Trudeau plans to use the deficits to help fund investments like infrastructure, which he argues will stimulate the economy and create jobs.
On top of that, Robson predicted Morneau will find that raising taxes on highest earners won’t yield as much revenue as the Liberals expect.
Morneau, who has also advised Ontario Premier Kathleen Wynne on pensions, helped build Morneau Shepell from a company that employed 200 when it was founded by his father into a firm that now has 3,300 workers across the country.
He told CBC he has communicated with the federal ethics commissioner about his holdings in the company and expects to put them in a blind trust, much like former Liberal finance minister Paul Martin did with Canada Steamship Lines.
Duff Conacher, co-founder of Democracy Watch, said while it’s legal for Morneau to keep his shares in the company, he believes he should sell them to ensure there’s full transparency and no conflict of interest.
“Blind trusts are a sham,” said Conacher, who also teaches political ethics at the University of Ottawa.
“There’s no such thing as a blind trust because you know what you’re putting into the trust and you get to choose the trustee.”