Justin Trudeau voluntarily moves personal investments into blind trust, fulfilling campaign promise

OTTAWA — Liberal leader Justin Trudeau has moved his personal stock holdings into a blind trust, fulfilling a promise made during the leadership campaign and making him the only party leader outside government to voluntarily adhere to the ethics measure.

In February, when he made a detailed disclosure of his personal finances to the Ottawa Citizen, Trudeau said that he would park his stock portfolio in a blind trust should he win the leadership.

A document provided by his office this week shows that the blind trust was set up by BMO Harris Private Banking earlier this month.

“The objective of establishing this Blind Trust is to avoid any risk due to conflict of interest,” said the July 19 letter to Trudeau from Joël Carrier, the firm’s vice president.

The objective of establishing this Blind Trust is to avoid any risk due to conflict of interest

“For this purpose, we will provide you with a quarterly statement in the format of a summary. This will allow you to see your portfolio fluctuations without the detailed view of your investments.”

The trust includes all Trudeau’s assets, exclusive of real estate, his office said.

Trudeau revealed in February that he had inherited assets worth about $1.2 million from his father, Pierre Trudeau, who had in turn inherited from his father, a successful Montreal businessman.

Dividends from these assets earned him a maximum of about $20,000 annually, he said.

According to an August 2011 valuation, Trudeau’s holding company, 7664699 Canada Ltd., listed $958,000 in short-term investments and $255,000 in cash.

Trudeau also provided an itemized list of public speaking events for which he was paid a total of $1.3 million over six years.

That some of the events were held after he became the MP for Papineau in 2008 triggered sharp criticism from Conservatives and others who say Trudeau shouldn’t have been paid for these public appearances once elected, particularly when speaking to charities. He stopped taking paid speaking work when he launched his leadership bid.

Trudeau said at the time that he wasn’t entirely certain which publicly-traded securities were in his portfolio. He said he trusted Montreal investment advisers Jarislowsky Fraser to manage the holdings on his behalf.

“I don’t care to know,” he said. “I’ve been having it as a de facto blind trust.”

In the interest of transparency, he said, he would formalize the arrangement and move the assets into a blind trust — the same requirement that the ethics commissioner typically requires of federal cabinet ministers — even though the Conflict of Interest Act does not require it of opposition party leaders.

Because cabinet ministers have access to information that could potentially affect the value of their stock holdings, they let an arm’s length trustee make decisions about their holdings to insulate them from potential conflicts of interest. But opposition MPs, including leaders, don’t typically have any insider information that could create conflicts.

Disclosure documents show that nine current cabinet ministers hold assets in blind trusts, some through their RRSPs. Like Trudeau, ministers receive regular updates on value of their portfolios but aren’t supposed to know the contents. If they chose, they can apply to the have cost of trustee fees reimbursed by their departments but first must have the invoices approved by the federal ethics commissioner.

(Last year, the commissioner approved $602,672 in such fees for all public office holders, a group that also includes patronage appointees, senior public servants, ministerial staff and others.)

Three other Conservative MPs who serve as parliamentary secretaries — Andrew Saxton, Chungsen Leung and Bob Dechert — have also placed assets in blind trusts under the Conflict of Interest Act, according to their disclosures.

Because of a quirk in the ethics rules, cabinet ministers’ spouses are unencumbered by any blind trust requirements. They can trade stocks freely without detailed scrutiny of the ethics commissioner and must only declare that they hold a portfolio if its value exceeds $10,000.

Trudeau’s decision to voluntarily establish a blind trust means he will have less information about his stock portfolio than the spouses of cabinet decision-makers such as Transport Minister Lisa Raitt or Prime Minister Stephen Harper.

Last year, the public ethics disclosure showed Harper’s wife, Laureen, liquidated a portfolio she held through broker Raymond James Ltd. that was partially composed of publicly traded stocks. There was no indication of which stocks were held in her name, exactly when she decided to sell them, or where the money went.

Harper himself declared no assets, suggesting that the couple’s stock investments were made in Laureen’s name.
The Prime Minister’s Office refused to give any further details.

Before he left parliament, Trudeau’s predecessor, interim Liberal leader Bob Rae, declared a TFSA and RRSP as well as investment accounts with BMO Nesbitt Burns, but did not manage them through a blind trust.

NDP leader Thomas Mulcair’s disclosure does not list any publicly-traded securities nor does that of Green Party leader Elizabeth May.