The spouse of the chief of staff to Prime Minister Justin Trudeau, a plugged-in Liberal in his own right, embarked on a concerted effort to lobby ex-finance minister Bill Morneau’s office to change a multi-billion dollar emergency wage subsidy program to benefit his company, VICE News has learned.
The revelations, even if the attempts were ultimately unsuccessful, comes as the Trudeau government grapples with two concurrent ethics investigations tied to a youth grant program. It also comes just after Morneau resigned abruptly amid clashes with the prime minister over COVID-19 spending programs.
Rob Silver is a former lobbyist who now serves as Senior Vice President for mortgage and insurance giant MCAP. He is also married to Trudeau’s chief of staff, Katie Telford. According to two sources familiar with the matter, Silver repeatedly asked his partner’s government to change its COVID-19 emergency assistance program for businesses so it would include MCAP.
Silver went so far as to request specific legislative amendments to the Commercial Emergency Wage Subsidy, according to two sources who are familiar with the matter.
Under the emergency subsidy, Ottawa pays up to 75 percent of employee salaries to eligible businesses—a program designed to prevent mass lay-offs amid the worst pandemic in the last century. Regulations drawn up by the government, however, set conditions on who qualifies for the subsidy. Generally speaking, an employer must be a tax-paying corporation or a partnership where the majority ownership rests with a tax-paying company.
The requirements set out in legislation and regulation are very specific, but also cover a significant portion of the Canadian economy. According to the federal government, some 840,000 employers have been approved for the subsidy, totalling $27.5 billion.
MCAP Commercial LP, however, is a partnership, where 75 percent is owned by the Caisse de Dépôt et Placement du Québec—Quebec’s government-created pension fund. Because the Caisse is tax-exempt, it does not qualify for the wage subsidy. By extension, sources say, neither does MCAP.
After the wage subsidy legislation, C-14, was tabled in Parliament in April, Silver began reaching out to contacts in government to express his frustration over the program. According to the two sources familiar with the exchanges, Silver began pressuring Morneau’s Chief of Staff Elder Marques, and Director of Policy Tyler Meredith, to expand eligibility to cover MCAP.
Silver, according to those familiar, made multiple phone calls and sent multiple emails, some of which requested specific legislative changes he wanted to see incorporated into the legislation or regulations. Silver wanted the program to be opened up to include limited liability partnerships, like MCAP. The changes, both sources agree, would have uniquely benefited MCAP.
The sources familiar with the affair spoke to VICE News on the condition of anonymity. Silver did not respond to multiple requests for comment.
A source familiar with the matter said Telford was never part of the conversation around MCAP’s eligibility for the wage subsidy. A spokesperson for the prime minister’s office confirmed that Telford “has not been involved in any discussions related to MCAP.”
The prime minister’s office did not address specific questions around Silver’s requests of the wage subsidy, except to say that “the Prime Minister’s Office takes all its obligations regarding ethics very seriously and follows the rules.”
Morneau’s office told Silver that such requests were inappropriate, according to both sources, given that Silver is a former lobbyist, now representing a company which does business with Ottawa, and the partner of the chief of staff to the prime minister. Few people in the country would have direct access to as many senior officials as Silver.
Not satisfied, Silver went to the prime minister’s office, where he made the same request of Mike McNair, a special policy advisor to the prime minister’s office.
One source says McNair referred Silver back to Morneau’s office, and asked the staffers there to speak to him.
A source in government stresses that McNair had been an informal advisor at the time of his conversations with Silver, and therefore not a “public office holder.”
McNair had been Trudeau’s seniormost policy advisor, but left that role in January. The government source says McNair returned to a former role in June, although McNair’s own LinkedIn reports his role as “special advisor” for the COVID-19 response began in March. Another source says McNair was in briefings since the early days of the pandemic, and usually included on email chains.
McNair declined to comment for this story.
Ultimately, Morneau’s office did not give in, and the eligibility for the program remained as-is. The exchanges, however, left several staffers feeling uncomfortable.
The Lobbying Act makes clear that someone must register with the lobbying commissioner if they aim to communicate with a “designated office holder” around drafting or changing legislation. Per an online test set up by the lobbying commissioner, employees who communicate with the government “about the making, developing or amending of federal legislative proposals, bills or resolutions, regulations, policies, or programs” should register.
The Act was designed to ensure a level playing field around engaging with government officials. And, as the lobbying commissioner phrases it, “it is desirable that public office holders and the general public be able to know who is engaged in lobbying activities.”
MCAP, in an email statement, told VICE News that “MCAP, through counsel, consulted with Canada’s Lobbying Commissioner in January to establish proper screens and protocols around any engagement with government. MCAP and its employees and officers have strictly complied with the letter and spirit of this guidance and all applicable laws.” A source in government says Silver himself spoke to the lobbying commissioner in January, upon getting the job at MCAP. He has not, however, registered as a lobbyist.
The mortgage company did not answer questions as to whether Silver filed reports to the lobbying commissioner over his communications with his contacts in government.
The Act requires that, if lobbying constitutes “a significant part of the duties of one employee” of a company, they must register as a lobbyist. Once registered, they are required to log and communicate meetings between their in-house lobbyists, and the government. MCAP’s most recent lobbyist registry was for an outside consultant, and ended in May of this year. Silver was last registered as a lobbyist in 2013.
VICE News could not confirm what procedures were put in place following MCAP’s conversations with the lobbying commissioner in January, nor whether he would qualify as an in-house lobbyist. MCAP did not respond to requests for comment as to whether they have registered, or intend to register, Silver as a lobbyist.
WE Charity, embroiled in a scandal over the government’s Canada Student Service Grant, has recently got in trouble for something similar. Even after dozens of phone calls, emails, and meetings with federal officials in order to try and win contracts and grants, it did not register as a lobbyist until the extent of its lobbying was revealed publicly.
Breaching the Act can come with hefty financial penalties of up to $200,000 and possible lobbying bans.
While MCAP didn’t qualify for the wage subsidy program, it did win a contract to administer an $84 million rent relief program, designed to help landlords and commercial tenants through the COVID-19 shutdown. The program was run by the Canadian Mortgage and Housing Corporation, an arms-length government agency, but sub-contracted to MCAP.
In recent weeks, it has emerged that Silver met with the government-owned corporation over the rent relief program. While opposition parties have made much hay of the meeting, Silver and Telford confirmed that the communications were cleared through the Conflict of Interest and Ethics Commissioner, and Telford recused herself from any decisions that may have benefited her spouse’s company. Telford also has a voluntary ethics screen when it comes to her spouse’s work, meaning she discloses any possible conflicts and recuses herself from decision-making when necessary. The contract with MCAP was publicly disclosed.
The Prime Minister’s Office noted to VICE News that, following the setting up of Telford’s voluntary screen, “the office [of the ethics commissioner] said no additional measures were required.” The screen, they said, “has been diligently followed since it was implemented.”
It’s not clear what steps were taken to address a possible conflict around the wage subsidy.
The offices of the commissioners of lobbying and ethics wouldn’t comment on the specifics of this story, citing confidentiality.
Both Morneau and Trudeau are currently being investigated by the ethics commissioner over their role in approving a sole sourced contract for WE Charity, which was selected to dole out grant money to Canadian youth during the pandemic. Trudeau’s family had been paid speaking fees by WE, while Morneau had travelled abroad with the charity. Both Trudeau and Morneau admitted they should have recused themselves.
Morneau resigned abruptly as finance minister earlier this week—a series of leaks underscored both an ideological and personal rift between himself and the prime minister. A series of leaks, primarily from the prime minister’s office, raised doubts over Trudeau’s confidence in Morneau, and suggested the prime minister was keen to appoint ex-Bank of Canada governor Mark Carney into the finance post. A source with knowledge of the internal deliberations says Carney is set to run in an upcoming byelection.
After this story was published, two sources reached out to VICE News to report that Carney would not, in fact, be running in a byelection after all.
Morneau, meanwhile, is said to have been uncomfortable with the amount of spending being planned for the upcoming fall budget.
Following Morneau’s announcement, Trudeau prorogued Parliament, abruptly cancelling committee hearings scheduled to look into both the WE affair and MCAP’s involvement in the rent abatement program. They will not reconvene until late September.
A spokesperson for opposition finance critic Pierre Poilievre told VICE News that the Conservatives had planned to introduce a motion to have the House of Commons finance committee investigate MCAP’s involvement in the rent assistance program. With prorogation, that study won’t begin until September at the earliest.
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