Prime Minister Mark Carney and other Canadian prime ministers should be required to divest their investment portfolios when they assume office, not just put them in a blind trust, the House of Commons ethics committee recommends in a new report.
In its report made public Thursday morning, the committee said putting assets in a blind trust isn’t good enough, recommending instead “that the Government of Canada amend the Conflict of Interest Act that, for the application of subsection 27(1) the prime minister, as a reporting public office holder, is fully divested from their controlled assets through sale, since placement in a blind trust does not constitute true divestment.”
The committee also wants the law amended to require public disclosure of “high-level holdings categories placed in a blind trust by reporting public office holders (sector/asset class, and whether the holdings are Canadian-market concentrated),” a recommendation that could shed new light on the financial interests of a number of top officials and cabinet ministers.
The only real difference is the tax consequences of selling it. If you want to force PMs to pay taxes on it by selling it that’s one thing, but if the goal is just to have the trust be able to invest how they want, they could waive the taxes and let them make some special adjusted cost basis change, so whatever the trust invests in instead has an equivalent cost basis, not the current price.
The trusts know what PMs own before as it’s all disclosed. They are either going to keep it, or sell it as soon as they get it, and the PMs have no idea which.
Edit: neutralized the language as it’s about any future PM, not only this one.
You have a wildly inaccurate concept as to how blind trust operate. They’re not cutthroat aggressive day traders. The job of a blind trust is to shepherd a portfolio. It’s not that they’ll never sell anything because obviously they will sometimes but it would be rare for them to aggressively change a portfolio that was already successful. They are largely a conservative and non-reactionary concept. By the time a blind trust ends it would be wildly unusual for it not to look 90% the same as when it went in.
The idea that the PM would not generally know what was in his trust is just bonkers.
How is that going to change if they know what he had from public disclosures and they get a pile or cash instead? It wont.
If what you say is true, they’ll just rebuy the same successful portfolio and it’ll be 90% the same anyway.
That’d be the most conservative approach, dont change what they had that was working.
I’m perfectly okay with them just rebuying it afterwards. That’s fine by me. They’ll be buying it at a higher price. But that’s fair. The point is that they’re not materially benefiting while in office. If when they’re out of office they buy the things that they made stronger then that’s perfectly fine.
The corruption is the difference. The difference is them increasing the value of something while they hold a piece of it. If they don’t have it while they increase the value there’s no corruption, and assuming there’s no other quid pro quo.
If i have $1,000,000 in Apple (edit today) and am forced to sell it, and after rebuying it tomorrow in the blind trust i have 700,000 due to taxes I still have 700,000 in apple. The only difference is the taxes and now its easier to claim a capital loss.
The price doesn’t matter. If it goes down and its worth $600,000 that million would have been worth 875,000 instead or whatever.
They either pay 125k less in capital gain taxes because they haven’t sold if they sell or they get a 100k capital loss to put against a future gain tax free.
Its ultimately the same, you just forced all PMs to pay a tax to become PM, but dont ultimately change any of the corruption youre worried about.
Its tax + theater if what you say is true and blind trusts are conservative and dont want to change anything.
Edit: clarity, but also the only way to not have the problem you’re worried about is to not allow them to own anything, or maybe only a broad market ETF like VEQT or one with bonds like VGRO in a blind trust, but at that point why even need a trust.
Edit: or a rule the blind trust cant own any individual stock previously owned.
You seem so concerned with taxes it’s like you’re missing the forest for the trees. I don’t care if he has to pay a tax. You make a profit you pay a tax. That’s called the way it’s supposed to work. That’s not a punishment.
What’s important, the only thing that’s important, is the corruption. The idea that he’s owning this stock while he’s in office and doing things to make the stock more valuable with the powers of his office. That’s the ball game right there. If he doesn’t own the stock then he’s not financially benefiting from the powers of the office. That’s the entire ball game. He’s not financially benefiting. Him buying it again later is immaterial.
And he’s still going to own the stock.
You said it yourself. The trust is conservative, rarely changes things and wont want to change what was already working.
They will rebuy the same, already working portfolio.
You arent solving anything making them sell it. Its a rule that does nothing. Its theater.
You even said you’d be okay if the trust just rebuys it.
Edit: Im focusing on the taxes because thats all this actually does. It doesn’t stop or solve corruption. It just taxes future PMs. If you actually want to do something meaningful, this isnt going to be it alone.
Wait why would the trust even exist anymore? The whole point is to sell the stocks before he takes office. There would be no need for a trust. He wouldn’t be owning stocks during his time in office.
Is that the disconnect? Is that the Assumption you’ve been operating under? That he would sell his stocks the day before he takes office and buy them again the day after? Cuz that’s not the idea. The idea is he wouldn’t own stocks while in office.
Seems so.
The article isn’t saying he can’t own assets, its saying he must sell his existing assets before taking office.
He’ll still have millions of dollars or whatever it is, it’s not just going to sit there doing nothing. Divesting doesn’t mean it can’t go into a blind trust after which will trade it as they see fit.
The law would need to say something like, the trust can’t own what he previously owned, or can’t purchase any individual stock, or say the PM cannot own any investment assets period.