Trudeau, Morneau to meet amid speculation over finance minister’s future

Canada’s Minister of Finance Bill Morneau attends a news conference with Prime Minister Justin Trudeau in Ottawa on March 11, 2020.

Blair Gable/Reuters

Prime Minister Justin Trudeau is meeting with Bill Morneau on Monday amid questions about the extent of the federal government’s pandemic spending and the Finance Minister’s political fate.

The Prime Minister and Mr. Morneau are scheduled to meet in a bid to sort out their differences, Reuters news agency reported Sunday, citing sources who requested anonymity given the sensitivity of the situation.

The Monday meeting was reported first by Bloomberg.

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Mr. Morneau’s office declined to confirm to The Globe and Mail that the discussion was to take place and it did not answer when asked about the Finance Minister’s relationship with the Prime Minister.

The Prime Minister’s Office also did not respond to requests to comment on Monday’s meeting.

The meeting marks a high-stakes moment for Mr. Trudeau and Mr. Morneau, who has served in his portfolio since 2015.

Two sources told The Globe on Sunday that the PMO has been going around the Finance Department to consult private-sector economists on what levels of government spending and deficit are tolerable to credit rating agencies.

On Tuesday, The Globe reported that sources said Mr. Trudeau is not committed to keeping Mr. Morneau on as the key architect of the federal government’s economic revival plan after the two clashed over the Finance Department’s policy responses to the COVID-19 crisis.

Mr. Trudeau was uncertain whether Mr. Morneau was the right fit to steer the country into a postpandemic economic recovery, insiders said.

The Globe and Mail did not identify the sources because they were not authorized to speak publicly about Mr. Trudeau’s plans for a cabinet remake that could lead to the departure of Mr. Morneau.

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The PMO issued a statement after The Globe report that said Mr. Trudeau had full confidence in his finance minister.

In July, the Prime Minister’s Office was caught off guard when Mr. Morneau revealed he recently repaid $41,366 to WE Charity for expenses incurred on trips his family took with the organization to Kenya and Ecuador three years ago.

In testimony before a parliamentary committee, Mr. Morneau said his wife and daughter travelled to Kenya in the summer of 2017 to learn about WE school projects and that, later that year, he travelled to Ecuador with his family to see and participate in WE’s humanitarian work in that country.

The Ethics Commissioner is now investigating Mr. Morneau and Mr. Trudeau over whether they breached the Conflict of Interest Act. The probes stem from a now-cancelled contribution agreement of $543.5-million with the charity that has been the subject of much angst this summer for the Liberal government.

Nik Nanos, the founder and chief data scientist of Nanos Research, said in an interview that the minister of finance is usually one of the most powerful cabinet ministers sitting around the table and that whenever there is a disagreement between the minister and the prime minister it is “never good.”

Mr. Nanos also said the WE controversy had a significant negative impact on Liberal Party support. But he noted that weekly tracking by his firm is showing that the impact has been abated following the testimony of the Prime Minister and his chief-of-staff, Katie Telford, before a parliamentary committee.

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“That was the key pivotal moment for the Liberals when they started to staunch the bleeding of support,” Mr. Nanos said.

Mr. Trudeau told the House of Commons finance committee on July 30 that WE Charity got “no preferential treatment” and he “pushed back” when he heard of the idea of the charity administering the program because he wanted to make sure the public service was ready to fully justify the choice.

Mr. Trudeau has also apologized for not recusing himself from cabinet discussions on the contribution agreement with the charity despite his family connections to the charity.

His wife, Sophie Grégoire Trudeau, is an ambassador for the organization and his mother and brother have both been paid for speaking engagements.

WE Charity has said that since 2016, the Prime Minister’s mother, Margaret Trudeau, has been paid about $312,000 in speaking fees and his brother, Alexandre Trudeau, received about $40,000. Ms. Grégoire Trudeau was paid $1,400 for one appearance, at an event in 2012.

Conservative finance critic Pierre Poilievre said Sunday the Prime Minister would have fired Mr. Morneau weeks ago for accepting the trip from the charity but said the problem has been that Mr. Trudeau would have to fire himself for his own ethical lapses.

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Mr. Poilievre predicted Mr. Trudeau’s team would make a “forthcoming firing” of Mr. Morneau about a policy fight when there is no such row.

NDP ethics critic Charlie Angus said Sunday the Liberal government will be rocked by two damning reports from the Ethics Commissioner once released.

“They [PMO] have been sending signals ever since Morneau forgot about the $41,000 in flights, that they’re not happy with them, that there’s problems,” he said. “I think it’s that they know they can’t continue with Morneau.”

With reports from Reuters and Robert Fife

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