Former federal finance minister Bill Morneau says the business community did little to help advance crucial policy initiatives to boost Canada’s economy while he was in office, and was pre-occupied with lower taxes.
Morneau, who ran human resources services firm Morneau Shepell before going into politics in 2015 — subsequently resigning his seat and the finance portfolio in August 2020 — made the remarks in a lengthy prepared speech for an address at the C.D. Howe Institute’s annual directors’ dinner Wednesday evening in Toronto.
“On the collaboration front, it was tough to get helpful input from business,” he said in his first major speech since leaving politics. “Most of the advice I received from business leaders boiled down to demands for lower taxes, but the reality is that Canada’s marginal effective tax rates are competitive.”
He acknowledged that more could be done, but added that Canada’s productivity and economic problems “are about much more than taxes.”
Indeed, when Morneau resigned amid the WE Charity scandal in the summer of 2020, Ian Russell, then chief executive of the Investment Industry Association of Canada, said Morneau’s tenure had been “disappointing” on issues including business taxes. He also cited competitiveness, and foreign investment.
Morneau notably tried to get the business community to invest in public-private initiatives such as large infrastructure projects. In his speech Wednesday, the former finance minister said the Canada Infrastructure Bank had “fallen short of the hoped-for impact” due to “a lack of commitment to the idea and politicians’ worst instincts.”
We need to get over the idea that government itself can solve all the problems we face
While he is no longer part of the Liberal government, Morneau’s speech also appeared to take aim at Conservative leadership hopeful Pierre Poilievre and his attacks on the independence of the Bank of Canada. Poilievre has pledged to get rid of Bank of Canada Governor Tiff Macklem if he forms the next government.
“When people of good conscience see politicians playing fast and loose with our institutions, they need to call out this behaviour,” Morneau said.
“That might help you sell a few more memberships. It might even help you win an election. But when you put ‘exciting the base’ ahead of crafting good policy … when you cynically pander to conspiracy theorists … you are doing incalculable harm to the country you claim to love and to the people you seek to lead.”
Morneau defended the independence of the Bank of Canada in his speech, and said its structure should serve as a model in other areas.
“One of the most important and effective decisions of a previous generation was to make the central bank independent,” he said “We need to look for other opportunities to decouple policy from politics.”
Other targets of his speech included the “politicization” and divisiveness of debate, which he said isn’t inevitable despite a system that is partisan and adversarial by design to ensure government is held to account.
“Political competition is essential in the same way that competition is essential in the market,” he said. “But political competition doesn’t have to be ‘winner take all’. It doesn’t have to be stupid.”
The former finance minister also took aim at the media, whose scrutiny he said could feel personal even if journalists were doing their jobs to hold the powerful to account.
At the time of his resignation from politics, Morneau and Prime Minister Justin Trudeau were being probed by the federal ethics commissioner over family and personal ties to WE, which had been handed a lucrative student grants contract at the outset of the COVID-19 pandemic. Trudeau was later cleared but it was found that Morneau should have recused himself from cabinet discussions on awarding WE Charity the multi-million dollar contract, something he acknowledged after the ethics commissioner’s finding.
In his speech Wednesday, Morneau sounded a hopeful note for Canada’s prosperity — if various levels of government and the business community can find ways to work together to address Canada’s slipping productivity, “anemic” capital investment, and lagging comparative GDP growth projections.
“We need a national body that focuses attention and forces discussion on our need for economic growth — and we need to get over the idea that any one party has a monopoly on good ideas,” he said.
“In fact, we need to get over the idea that government itself can solve all the problems we face. Climate investments, addressing our productivity challenge, an aging society … those are all shocks to the supply side of the economy, and real solutions are more likely to be found around the boardroom table or in universities and think tanks than at the cabinet table.”