Charting corporate connections in the new Liberal cabinet

By Samantha Ponting

Last week, there was widespread swooning over the newly appointed Trudeau cabinet, an amount of public adoration rather unsettling for those of us that remember the ugly days past of Liberal austerity. In addition to Liberal supporters, many progressives applauded Trudeau for appointing a diverse cabinet and practicing gender parity. While straight from the handbook of NDP Alberta Premier Rachel Notley, the gender parity move got Trudeau much public attention and praise.

Trudeau is well positioned to practice populism. He has the easy yet rewarding opportunity to repeal various pieces of legislation that, under Harper, have ranged from psychotic to malicious. In a press release from the Canadian Labour Congress, Trudeau’s commitments to repealing anti-labour bills C-377 and C-525 are outlined. According to the CLC, his speech marks the first time in 50 years that a sitting prime minister has formally addressed the congress, “signaling the onset of a new era in relations between the labour movement and the federal government.”

But as Rabble.ca contributor Nora Loreto points out in her analysis of the meeting, “Labour leaders must welcome this era with extreme caution.”

Amidst all the talk of change, there are reasons for concern. While the NDP has been the traditional party of the Canadian labour movement, the dollars of a different base launched the Liberals into power, and progressives shouldn’t forget this.

During the election campaign, the Liberals faced widespread scrutiny over the tactless actions of then-Campaign Co-Chair Dan Gagnier. He resigned after the Canadian Press obtained a copy of an email he sent to five TransCanada Corp officials, which advised them on how they could best lobby a Liberal government on the approval of the Energy East pipeline. The party initially defended Gagnier, and the incident highlighted the Liberals’ connections to Canada’s pipeline power players.

A glimpse into Trudeau’s cabinet appointments paints a similar picture, and it doesn’t look pretty. With so many corporate heavy hitters, there is cause for concern regarding which economic philosophies will form the backbone of the Trudeau government.

So just who in the cabinet has big friends in rich places? And can we expect Liberal austerity to rear its ugly head?
 
Ralph Goodale: Minister of Public Safety and Preparedness

The former Liberal Party deputy minister was also the finance minister under Paul Martin. While Goodale spoke during the election in favour of deficit spending, a principle that resonates well with left-leaning economists, Goodale’s track record speaks volumes.

The 2005-2006 federal budget – to date, the most recent federal Liberal government budget, as presented by Goodale under the Paul Martin Liberals – could be chiefly defined by its devotion to corporate tax cuts. Goodale committed to reducing the general corporate tax rate from 21 per cent to 19 percent by 2010. The 2005-2006 budget also proposed massive increases to military spending, with 12.7 billion dollars committed to the Department of National Defense over five years –more than double what was allocated to tackling green house gas emissions.

While Harper ultimately did not support the budget, when it was first announced in the House of Commons, Harper signaled support, affirming that it was in line with Conservative values surrounding tax cuts and military spending.

If Goodale’s track record as former finance minister is any indication, the Liberals are lacking progressive leadership surrounding sound economic policy.

John McCallum – Minister of Immigration, Refugees, and Citizenship

John McCallum has held various portfolio positions under the Chrétien and Martin Liberals. Prior to his career in politics, McCallum was chief economist for the Royal Bank of Canada. RBC has been listed as the largest Canadian company by revenue generation, and is currently listed as #53 on the Forbes 2000 Global Listing, holding 857 billion in assets.

As R&F.ca’s Andrew Stevens points out, times are good for Canada’s banks, but not so good for their workers.

“Times are good for Canada’s banks. At the end of 2013, the country’s Big Five – Royal Bank of Canada, Scotiabank, CIBC, TD, and Bank of Montreal – delivered a record $29 billion in profits and stock value is up 20 percent from the year before. The CEOs of these financial institutions list as some of the top earners in Canada, together bringing in over $46 million in executive compensation. But what of the workers employed by these banking giants?

RBC CEO, Gordon Nixon, was on the defensive for much of 2013 when the bank outsourced some of its domestic information technology work to an India-based company, iGate. Of course, RBC had been farming out work to iGate for years, but scandal erupted when the multinational IT firm looked to Indian temporary foreign workers to staff its operations in Canada. Dozens of highly skilled workers were laid off and made to help train their own replacements before being ignominiously dismissed.”

McCallum’s connection to a banking giant with an anti-worker agenda entitles him to some well-earned skepticism from progressives.

Bill Morneau – Minister of Finance

The Globe and Mail calls Morneau a “familiar face on Bay Street,” and a millionaire. He’s the former executive chair of Morneau Shepell, whose firm’s annual revenue, according to the Wall Street Journal, is clocking in at $535.87 million. Morneau Shepell is Canada’s largest manager of private-sector pensions, according to the Globe.

The Minister of Finance has some clear Conservative leanings. As reported by ipolitics, “Morneau is an especially unorthodox choice for the new Liberal cabinet in that he has donated to the Conservative Party. His Conservative donations include $500 to the Don Valley West Conservative Association in 2005, and $1,000 to the Conservative candidate in that riding, John Carmichael, in 2011.”

But perhaps most concerning is Morneau’s past position as chair of the conservative economic think-tank the C.D. Howe Institute.

What’s wrong with the C.D. Howe Institute?

The C.D. Howe Institute has been a long-standing advocate of trade liberalization and corporate tax cuts, and widespread tax cuts in general since its beginnings in 1958.

It boasts of having been an “authoritative voice” on the controversial subject of Canada-US free trade, particularly through the 1980s. The institute claims its advocacy helped rein in national spending throughout the 90s, under the leadership of investment banker Thomas E. Kierans.

A quick perusing of the think tank’s website and you’ll discover that they’ve published some pretty audacious policy pieces, with bold (and laughable) titles, such as, “Federal Corporate Tax Cuts Would Lift Canada’s Standard of Living,” “Inflated Taxes, Deflated Paycheques,” and my personal favourite, “The 2005 Tax Competitiveness Report: Unleashing the Canadian Tiger.” Whoa, boy, down boy.

The institute has argued that corporate tax increases are “often hurting lower income Canadians the most,” and that “the more resources used by governments to fund public services, the more taxes will impinge on the private sector’s desire to work, save, invest and take risks.”

The institute promotes a particularly horrific genre of capitalism gone wild – one where income inequality is reveled, and collusion between Bay Street and parliament is wholly embraced. The cutthroat and conservative C.D. Howe Institute is watching its vision for Canada unfold with Morneau in the Finance portfolio.

And Bill Morneau isn’t the only cabinet minister with connections to the C.D. Howe Institute. Jean-Ybes Duclos, the Minister of Families, Children and Social Development is a Fellow in Residence at the institute.

Mélanie Joly – Minister of Canadian Heritage

Mélanie Joly, a former Montreal mayoral candidate and lawyer, is also a former managing partner of the international public relations firm Cohn and Wolfe, whose mandate, in large, is to protect corporate reputations and deliver effective branding.

While Cohn and Wolfe keep their client list largely under wraps, the firm has represented some major multinationals, such as food giant Danone. Danone experienced a massive public relations crisis in 2013 when the company was accused of misinforming breastfeeding mothers on infant health, in a Turkish marketing campaign uncovered by the Bureau of Investigative Journalism for the Independent.

Mélanie Joly’s experience in the dark art of corporate public relations brings a certain cunning intelligence to Trudeau’s cabinet.

Scott Brison – Treasury Board President

While Morneau’s ties to the Conservative Party are financial, Brison’s are political.

A former investment banker, Scott Brison was originally an MP for the Progressive Conservatives for the riding of Kings-Hants, from 1997-2003. In 2003, following the retirement of Joe Clark, Brison ran for the leadership of the Progressive Conservatives. During the race, he challenged the party to “drop the safe middle ground,” and “adopt a more pro-business agenda,” according to the Halifax Herald. While Brison voted in favour of the PCs merging with the Canadian Alliance, he crossed the floor to the Liberals in December, 2003, following the merger.

Despite his rejection of social conservatism, Brison’s past flirtation with fiscal conservatism is cause for alarm.

Taming Trudeau’s Tigers

While the Liberals have a historical tendency of campaigning from the left and governing from the right, only time will tell whether Trudeau and his pack will follow suit. What’s clear is some of the Liberal Party’s leadership has clear connections to Bay Street and the 1%, as well as ties to Conservative politics. In the face of all the hoopla, it’s important that progressives remain realistic about the Liberal Party’s loyalties, and keep up the public pressure for progressive policy, against a government ridden with contradictions.