In and Out of Cabinet

The announcement of Morneau’s placement comes just over two years following his departure from the federal cabinet. At the time, rumors circulated of “tensions” within the administration over the government’s pandemic measures. Reportedly, after preparing more than $700 billion in corporate bailouts, the finance minister wanted to cut down the government’s already paltry benefits for unemployed workers.

As one inside source divulged to Bloomberg, “Morneau argued for a less generous cash benefit, in part because he feared the possibility some recipients would be reluctant to return to work.” The ex-minister was also embroiled in a controversy over a plan to subsidize a WE Charity jobs program that, with cabinet’s endorsement, paid less than minimum wage.

Morneau has been busy since his replacement in the administration by Chrystia Freeland. He campaigned unsuccessfully, with public money, to head the OECD, commissioned a “tough” ghostwritten memoir, and has offered his eminent insights to Canada’s right-wing think tanks. In one such speech to the C. D. Howe Institute, Morneau, as its former executive, complained that, in Ottawa, the drive to make Canada more “competitive” lacks “urgency.”

According to Morneau, the biggest problem Canada faces — as a country that has been governed by the federal Liberals for roughly eighty of the past hundred years — is too much “politics.” In particular, Morneau laments that, when government policy is “politicized,” too much “time and energy was spent on finding ways to redistribute Canada’s wealth.”

Defending the “Job Churn”

In late 2015, Trudeau’s incoming government proclaimed pension “reform” would be one of its first priorities. Soon thereafter, Morneau’s proposed Bill C-27 would have allowed federally regulated companies to unilaterally, and even retroactively, cut their pension obligations.

Morneau claimed that the bill had nothing to do with his past history as head of Morneau Shepell (now LifeWorks), one of Canada’s largest human resources firms. Rather, the bill was simply the latest iteration of his supposed “advocacy to improve pensions for Canadians.” That “advocacy” seems to go as far back as his coauthored 2012 book, Real Retirement, which advises that

accepting reduced compensation goes against the grain of the labor movement, but it is in the best interests of employees to be open to the idea. After all, they are prepared to accept lower pay and lesser benefits now, just not with the same employer. . . . It will be more efficient if this process of renegotiating the employment deal can happen without a change of employers.

While Bill C-27 died, Trudeau’s government soon tried to impose similar pension cuts onto Canada’s postal workers that same year, at one point even threatening to lock the workers out.

Morneau also provoked controversy with his direct advice to workers — that they accept the “job churn” of precarious employment. “It’s going to happen,” he said. “We have to accept that.” This insight was seemingly stitched into the design of the Canada Workers Benefit, a tax credit for the working poor. When Morneau was asked if it was a redistributive program by Maclean’s, he “bristle[d],” and retorted that “what the Canada Workers Benefit should do is to drag people into the economy who don’t have the ability to be there if they don’t see that additional benefit.” This idea persisted through the pandemic and appeared to shape much of the Trudeau government’s policy response. Top ministers were careful to ensure that COVID supports were not “too generous” to keep people from working. Likewise, the government’s unemployment benefits were cut and changed to push recipients to seek work — even if it meant accepting pay cuts.

Hobnobbing With Plutocrats

Morneau’s time in cabinet as finance minister was also marked by a vested interest in the fortunes of corporate Canada. Aside from exploring ideas on how to privatize Canada’s airports and other “federal government assets,” the best example was the Canada Infrastructure Bank.

Launched at the end of 2015, with $35 billion from the public and a mandate set at a shady meeting at Toronto’s Shangri-La Hotel, the bank aims to backstop the privatization of Canada’s crumbling infrastructure and to set up new public-private partnership projects (P3).

When asked by a CBC journalist whether the government would set limits on P3 user fees, Morneau refused to answer. A memo from Morneau’s department, at the time, would presumably mark events like these as “communications problems.” Within a few months of operation, the CIB’s CEO was very clear that when projects are launched “users will fund the bulk of the operations.” Several internal reports further reiterated this pledge.

Morneau’s cabinet was also fond of holding regular fundraising events with the wealthiest members of Canada’s beau monde. The Hill Times reported that the Liberal leadership was in “high demand” for what appeared to be cash-for-access fundraisers through the end of 2016. When asked about it, a spokesperson for the party claimed that fundraisers form an “important part of all MPs’ political engagement.” Predictably, Morneau was defensive, telling CTV that “what’s happening at those fundraisers is, people are saying we support the democratic process. [They’re saying] we think it’s important that we have good people that go into public life, and if we don’t support them, we don’t get good people in public life.”

In early 2017, new legislation sought to clean up the government’s image by mandating that fundraising events must be hosted in public places rather than private homes or clubs. Still, the party’s open fundraising registry confirms that regular hobnobbing with Canada’s moneyed class continued. In particular, events hosted by Morneau have been a who’s who of boutique corporate law firms, real estate firms, and private investment moguls.

The guiding lights of the Liberal Party, a last beacon of “open” capitalist management in the eyes of the Economist, are at home among the country’s rich and powerful because they share the same outlook, aims, and backgrounds. Over the course of the party’s long history, it has recruited corporate lawyers like Louis St Laurent and John Turner, corporate consultants like William Lyon Mackenzie King, corporate board members like Paul Martin, and many more like them into the federal cabinet. Morneau was just the latest iteration.

The Cuts to Come

Morneau may have been the Trudeau Liberal’s most open proponent of cuts and privatization schemes, but little has changed in the government’s policy positions since his departure. In October, Finance Minister Chrystia Freeland advised cabinet that new social programs will have to be funded by cuts — or “internal reallocations.” As the memo put it, “Canadians are cutting back on costs and so too is our government.”

Trudeau’s former advisor Mark Carney, the former head of the Bank of Canada and current head of transition banking for Brookfield, likewise told the Financial Post that austerity is “imperative.” The Infrastructure Bank, in a telling contrast, has been given new investment orders to inject funds faster and “create aligned incentives” with Canada’s “private sector.”

Morneau and the Liberal cabinet worked, and continue to work, to serve the rich at the expense of the rest of us. The main difference today, for Morneau, is that he does not need to be reelected to continue his tireless efforts on behalf of the rich and powerful.