Carney set up a blind trust, screens to avoid conflicts of interest. Is that enough?

When Conservative Leader Pierre Poilievre accused Mark Carney this week of being beholden to China, it was the latest in a series of barbs he's thrown at the Liberal leader's past corporate stints and personal financial holdings.

But it also raised questions as to whether the former board chair of Brookfield Asset Management, who may currently hold millions of dollars worth of stock in the company, has done enough to avoid potential conflicts.

"The solution to Poilievre's criticisms is that Carney needs to sit down with the ethics commissioner and talk about … the idea that his his [stock] options aren't going anywhere, likely," said Ian Stedman, a lawyer and associate professor who specializes in government ethics at York University's School of Public Policy and Administration.

"If there is something that can directly benefit the bottom line of Brookfield, and he knows it can, he shouldn't be involved with the decision-making."

Brookfield Asset Management is one of Canada's largest publicly traded companies. On its website, it bills itself as a leading global investment firm with over $1 trillion of assets under management.

And according to Brookfield's latest financial filings, Carney held stock options worth $6.8 million at the end of December. Stock options allow the holder to buy and sell shares in a company at an agreed-upon price.

Carney has faced repeated questions about whether his assets, now in a blind trust, could put him in a conflict of interest as prime minister, where he may be in a position to make decisions that would benefit his holdings.

Indeed, this week, Poilievre said Carney, while on the board of Brookfield Asset Management, helped secure a more than $250-million loan for the company from the Bank of China last November.

"How do we know [Carney's] not going to act against our interests in favour of his financial interest?" Poilievre asked.

Asked about Poilievre's allegations, Carney rejected that he is indebted to China and he repeated that, aside from cash and real estate, all his assets are in a blind trust.

Under the current government ethics rules meant to guard against conflicts of interest, Carney had 60 days to disclose his assets to the ethics commissioner upon being sworn in as prime minister and another 60 days before that information goes public.

Carney has so far declined to say what exactly those investments include.

"I have no control over [them] anymore," Carney told reporters in Gander, N.L., earlier this week. "I cannot divest anything from it. I can't change that. The trustee manages it accordingly."

Still, Stedman said a blind trust is not "a perfect conflict of interest avoider … it's the best possible tool that we've been able to come up with so far."

A blind trust is optimal for a public office holder who, for example, is a passive investor and pays little attention to the stocks they own, Stedman said.

In that case, the trustee may play an active role, buying and selling and trying to make the portfolio more efficient. That means the public office holder would have no idea what investments they hold and avoid potential conflicts, he said.

WATCH | Is Mark Carney falling short of Canada's conflict of interest rules?:

Despite his announcement last week confirming he’d placed his assets in a blind trust, Canada’s new prime minister has continued to be dogged by questions surrounding his financial holdings. So has Mark Carney successfully shielded himself from any potential conflicts of interest? Power & Politics hears from Ian Stedman, a lawyer who specializes in government ethics at York University’s School of Public Policy and Administration.

But for investments like Brookfield stock, he said it's more likely the trustee holds them.

"You can be pretty reassured that your options are still sitting there," Stedman said.

That means despite the blind trust, Carney could make decisions that benefit Brookfield's stock price while knowing his trust is likely to benefit, too.

"Is the blind trust a perfect tool? Absolutely not. It's never going to be," Stedman said.

Andrew Stark, a professor of strategic management and political science at the University of Toronto, said Carney's past dealings with China, including the Brookfield loan, are "an issue" and that the proper way of dealing with that is to insulate him from any decision that could directly impact Brookfield.

"You set up a series of ways of diverting issues from him," said Stark, who has been a policy adviser in the Office of the Prime Minister of Canada.

"That's not ideal, because he's the prime minister and theoretically, the prime minister should be certainly responsible for all major issues that the government faces."

To that end, Carney said that in co-ordination with the government's ethics commissioner, he has set up "screens" as another way of avoiding potential conflicts related to his past corporate work. That includes Brookfield, along with the financial services company Stripe, where he was also a board member.

Screens are made public and include a description of the conflict of interest, the names of the individuals and/or entities involved, the title of the screen administrator and a statement from the public office holder agreeing to abstain from any discussions, decisions, debate or votes concerning the subject of the conflict of interest.

Carney told reporters that those screens will be administered by John Hannaford, the clerk of the Privy Council, and Carney's chief of staff Marco Mendicino.

Stark said what that normally means is that any file that works its way up to the Prime Minister's Office, and that has been flagged by the ethics commissioner as affecting the interests of Brookfield or Stripe, will be intercepted by the clerk or the chief of staff and channelled to others — probably other ministers — to handle without the prime minister's knowledge.

"That's the theory. How well that works in practice will perhaps depend on the kind of issue at stake, since there presumably are some questions that the prime minister has to know about and/or decide," Stark said.

Melanie Rushworth, a spokeswoman for the Office of the Conflict of Interest and Ethics Commissioner, said that her office couldn't go into the details of ongoing discussions with Carney or his team regarding screens.

"We continue to review the information that Mr. Carney has submitted and to advise him on how to arrange his affairs to avoid conflicts of interest and comply with the [Conflict of Interest] Act," she said in an email.