Mistrust: Carney, Brookfield and Conflict of Interest
Mistrust: Carney, Brookfield and Conflict of Interest
In the opinion of this Calgary criminal lawyer, conflict of interest is a key issue to the 2025 election.
PREAMBLE: CONFLICTS OF INTEREST ACT
Section 4 of Canada's Conflict of Interest Act reads:
"For the purpose of this Act, a public office holder is in a conflict of interest when he or she exercises official power, duty or function that provides an opportunity to further his or her private interests or those of his or her relatives or friends or to improperly further another person's private interests".
The word "improperly" is important for this post.
In its preamble, Alberta’s Conflicts of Interest Act acknowledges that “…Members of the Legislative Assembly can serve most effectively if they come from a spectrum of occupations and continue to participate in the community”.
Undoubtedly this is important because Members of the Legislative Assembly (or Member of Parliament) ought to be able to draw from their individual life experiences so that they can best represent the interests of their Constituents, the Province or the Country. However, beyond recognizing the importance of each Members community experience, Alberta's Conflicts of Interest Act also recognizes that “Ministers and their staff must avoid conduct that violates the public trust or creates an appearance of impropriety”.
The notion of reasonable appearance of impropriety is important.
APPEARANCE OF IMPROPRIETY AND REASONABLE APPREHENSION OF BIAS
It is the appearance of impropriety that is central to this post. Appearance of impropriety is not the same as actual impropriety. To think about this issue, principles in criminal law are useful.
As the Supreme Court of Canada held in R. v. S.(R.D.), [1997] 3 SCR 484 (RDS), there is an expectation that “[t]he courts should be held to the highest standards of impartiality”. Similarly, I think it’s fair to say that our elected officials be held to the highest standards of propriety.
In RDS, the majority writing for the Supreme Court went on to say that “[f]airness and impartiality must be both subjectively present and objectively demonstrated to the informed and reasonable observer”. By way of example, a criminal trial can be rendered unfair if the words or actions of the trial judge give rise to either actual bias or a reasonable apprehension of bias. Reasonable apprehension of bias means that an objective observer would think that the judge is not acting with fairness and impartiality. In politics, a reasonable observer might think that the actions of an elected official create the appearance of impropriety.
In my opinion, reasonable apprehension of bias and reasonable apprehension of impropriety can be discussed together.
Actual bias is demonstrated if there is evidence that the judge possessed a real, genuine or authentic prejudice. Actual impropriety would consist of proof that the elected official truly committed an intentional misdeed or an illegal act. In most cases, “actual bias” and actual impropriety are likely difficult to prove.
“Reasonable apprehension of bias” and “reasonable apprehension of impropriety”; however, effectively allow for an objective analytical path to determining whether a judge or elected official has acted unfairly or improperly. The assessment is whether a reasonable, right-minded, informed person, applying themselves objectively, concludes that the trier of fact or the elected official lacked impartiality (or acted with impropriety) and as such, was not open to persuasion by the evidence, submissions or the facts or in the case of an elected official, may be using his or her position of power to advance personal interests rather than acting in the best interests of their Constituents or the Country.
BROOKFIELD ASSET MANAGEMENT
Conflict of interest has been raised in relation to Liberal Leader Mark Carney as a result of his economic relationship with Brookfield Asset Management (BAM). According to the CBC, “Brookfield Asset Management is one of Canada’s largest publicly traded companies. On its website, [Brookfield] bills itself as a leading global investment firm with over $1 trillion of assets under its management”.
https://www.cbc.ca/news/politics/carney-conflict-of-interest-brookfield-blind-trust-1.7493849
What is important to understand about Brookfield Asset Management is that it has substantial reach, with heavy investment in everything from pipelines (that are not on Canadian soil), to hydro-electric dams and windfarms (most not on Canadian soil), to investments in modular housing companies (not on Canadian soil), to investments in industrial products (not on Canadian soil) to property investments throughout the world.
https://www.todayville.com/fifty-shades-of-mark-carney/
Now, for those of you who think that Mr. Carney is a businessman who will have the back of businesses and taxpayers in Canada, it is important to appreciate that he is not the sole director of Brookfield Asset Management. It is also important to understand that Brookfield is more than a mom-and-pop business or even mid-side Canadian company struggling to exist in Canada’s over regulated, grossly taxed business environment. It is a multinational company with holdings all over the world – most not in Canada. It’s head-office, once located in Toronto, Ontario, was moved to the United States (allegedly with the support of Mr. Carney) soon after the election of U.S. President, Donald Trump.
https://financialpost.com/fp-finance/brookfield-moves-headquarters-new-york-for-us-index-inclusion
One might question the suspicious timing of Brookfield moving its head office from Canada to the United States.
To reiterate, Brookfield is not a middle-class business trying to survive in Canada. It is a publicly traded company that uses investment dollars by middle-class people to drive its business model. To be fair, it is well known and respected for routinely returning value to shareholders. It does so by consistently growing its share price and by paying shareholders a small quarterly dividend.
The issue with Mr. Carney’s investment in BAM is not so much that he is apparently still invested in the company, it is that for last few years he held a prominent role with the company. He is not merely a middle-class shareholder; he is very likely a massive shareholder with deep insight into the company’s investments and corporate procurements. By all accounts, it appears that Mr. Carney has a vested monetary interest in growing BAM and ensuring its vitality as a transnational corporation going forward. BAM arguably has a very beneficial interest in having its lobbyist seated prominently in the Prime Minister's chair.
BLIND TRUST
Today, Mr. Carney is an unelected Prime Minister, campaigning to become an elected Prime Minister.
As Prime Minister, Mr. Carney will be in a position of power and influence too such an extent that it is possible for him to use his position in the Prime Minister's office to advance his personal financial interests (along with the interests of a multi-national corporation).
To be fair, Mr. Carney has told us that his personal finances and investments have been put into a “blind trust”. A “blind trust” is a legal arrangement designed to offset conflict of interest issues. In a blind trust, a third-party trustee manages their client’s investments in a manner that the client is unaware and in theory has no power to influence the investment decisions.
In my opinion, the efficacy of a blind trust becomes a bit more complicated when the blind trustee is managing the portfolio for a person who holds a vast amount of power (such as a Prime Minister) and where that same person has deep historical insight into the portfolio managed– in this case, Brookfield Asset Management, Brookfield Renewables and Brookfield Residential.
Arguably, Mr. Carney's personal knowledge of the internal workings of Brookfield, its assets and procurements constitutes a kind of insider knowledge that no blind trust can cure.
Long before Mr. Carney’s more direct involvement with Brookfield, the company was a darling investment for stockholders. This criminal lawyer is reasonably well aware of Brookfield because he has long owned the stock and benefited from the investment.
My point with respect to this post is to outline a serious concern with respect to potential conflict of interest for Mr. Carney, notwithstanding the blind-trust.
Now to be fair, it would not be in the best interest of Canadians to force candidates like Mr. Carney to divest all of their holdings before running for Government office. This is so because if that was required, the Country might lose many qualified candidates whose personal inventory of unique life experience, wisdom, business acumen and intelligence translates into the kind of person who can effectively manage a Country.
With that in mind, while I have long had some concerns about Mr. Carney’s policy decisions (dating back to his tenure as the Governor of the Bank of Canada), I don’t think that for him to be Prime Minister he should be compelled to surrender his personal wealth or business interests. What I am concerned about, however, is that Mr. Carney will use his seat in the Prime Minister’s chair to advance policy that will benefit his investment portfolio and that he might do so at the expense of Canadians.
Brookfield Asset Management is a powerful corporate entity whose multinational interests could benefit from decisions made-in Canada and from the benefits of government contracts and taxpayer money.
For the purpose of thinking about conflict of interest, the question is whether a reasonable, right-minded person would think that there is an appearance of impropriety with respect to Mr. Carney’s important role as potentially Canada’s next Prime Minister, coupled with his interests in a multi-national corporation for which he was intimately connected. Mr. Carney says that his interests have been placed into a “blind trust’ and therefore, he has no control over the day-to-day management, investments or decisions made by the company.
While this may be true, I think the answer remains far from clear. I say this because one would be a fool to think Mr. Carney is truly blind.
As Prime Minister, Mr. Carney would have substantial influence over the day-to-day management of Canada while at the same time have a deep knowledge and understanding about the business operations of Brookfield Asset Management. Again, he was not merely a shareholder of Brookfield; for a period, he apparently sat on the board of directors.
CONFLICT 1: MODULAR HOMES
Lets look at some of Mr. Carney’s policy announcements made during this political campaign.
According to the National Post, “Liberal [campaign] promises just keep happening to intersect with Carney’s business interests”.
For example, in 2021 Brookfield invested in the Modulaire Group – a modular housing company. While campaigning for your vote, he recently unveiled a housing policy – one that promises to double the number of homes built in Canada to nearly half-a-million per year. That on its own is not particularly upsetting. What is problematic is that according to the Liberal website, Mr. Carney’s plan is to provide $10 billion in taxpayer dollars to subsidize “low-cost financing and capital to affordable builders”.
Think about that just for a moment.
Using my plebian math skills, assuming funding of 10 billion per year for half-a-million homes, that means that Carney’s large taxpayer subsidy will result in a relatively small reduction of $20,000 per home. As of February 2025 the average home price in Canada was just north of $712,000, so the subsidy, while useful, is probably more a waste of taxpayer dollars than use to the individual homeowner. But of course, Mr. Carney’s story does not end there; for the Liberals are also offering to “catalyze the housing industry” by providing over $25 billion taxpayer dollars towards “prefabricated home builders in Canada”.
Now things come into focus. Prefabricated or modular homes are going to be much cheaper to erect. A $20,000 subsidy per modular home is likely much more significant to the individual home buyer.
Enter Brookfrield Asset Management.
It is noteworthy that in 2021 (while Mr. Carney was apparently on the Board) Brookfield Asset Management spent 5 billion dollars to acquire Modulaire Group – a prefab, modular home company. This means that it doesn’t matter whether Mr. Carney is subject to a blind trust, because his critical observations about this aspect of the Brookfield portfolio was made 4 years ago. Therefore, when Mr. Carney now pumps the idea of prefabricated homes, a reasonable person might think that he is pumping his own financial best interests. One might also be concerned that Brookfield receive preferential treatment during the contract procurement stage.
Now, let’s stop and think about the idea of millions of prefabricated homes littering Canada’s landscape.
While I acknowledge that there are some relatively nice, quality prefabricated, modular homes, I question whether this kind of construction is something that most Canadians want in their community. I further question whether this is the kind of construction that can be affordably used to withstand Canada’s harsh and everchanging climate. I question whether this kind of construction can stand the test of time.
I imagine modular communities will look quite nice when first erected, but am concerned about these communities after years of being battered by occupant use, weather and other events. My point is, communities ought not to be short term creations; rather, they should be thought of as long term investments whose uniqueness and character is chiselled over multiple decades. The family home should not be a temporary, discardable creation – it should be a longstanding sanctuary occupied by generations.
Please understand, I am not opposed to modular homes and I understand that they might be a short terms solution to a long term problem. My issue is with building millions of them and I wonder whether any government policy to build millions of matchstick structures is truly in the interest of Canadians. One thing for sure, I doubt Mr. Carney’s neighborhood will be furnished in this manner.
Whatever the case, Mr. Carney is committing billions of taxpayer dollars to the very business that he is invested. This is a potential conflict of interest.
CONFLICT 2: HEAT PUMPS
The National Post also reported that the Carney Liberals unveiled a climate plan promising to “improve subsidies for heat pumps to make home heating more affordable”. Well, you might be interested to know that according to the National Post, Brookfield spent 5 billion USD in 2023 to acquire HomeServe – a company that does heat pump refurbishments. Blind trust or not, Mr. Carney was apparently involved in that deal for Brookfield. Worse, according to the National Post, Mr. Carney was not only involved in the deal to purchase HomeServe, he was a lobbyist for Brookfield Asset Management to sell its heat pump products.
As early as October, “…Britain’s The Telegraph reported that Carney had been actively lobbying the British Government to increase heat pump subsidies on Brookfield’s behalf”.
Presently, Mr. Carney has campaigned for Canadian taxpayer dollars to subside heat pumps. One doesn’t require a particularly active imagination to think “conflict of interest”. Now let’s double down: I’m sure Brookfield’s heat pumps integrate nicely with its prefabricated homes.
CONFLICT 3: ENERGY EFFICIENT HOMES
Again, according to the same National Post article above, Mr. Carney has also promised if elected to “increase financial incentive for energy efficient homes”.
While this Calgary criminal lawyer applauds this plan, I was left to wonder about potential conflict when I learned that Brookfield Residential is already a major home builder of energy efficient homes in Ontario and Alberta. Apparently, Brookfield Residential is building in Calgary’s Seton neighborhood.
Now, I am not arguing against energy efficient homes; rather, the simple mathematics suggested by the National Post (and other sources) adds up to conflict of interest for Mr. Carney. Triple down: I am sure BAM’s heat pumps integrate nicely with Brookfield’s energy efficient homes.
The issue is so obvious that it cannot simply be glossed over or treated as inconsequential to this election. The Liberals are campaigning on a platform to use taxpayer dollars in a manner that could substantially benefit not only shareholders of Brookfield Asset Management but Mr. Carney (our potential Prime Minister) himself. Full disclosure, this Alberta lawyer has a position in Brookfield and therefore, I would like my position to improve. A growth in Brookfield translates into money in my pocket. However, whether I want my position to improve or not, does not minimize concerns about conflict of interest.
CONFLICT 4 - DECARBONIZATION
According to the National Post, “in 2022 Brookfield partnered with Trane Technologies to offer decarbonization as a service for commercial , industrial and public sector customers”. Interestingly, Mr. Carney allegedly supports the “No New Pipelines Act”. This is a potential conflict of interest; for refusing to support new pipelines in Canada could benefit Brookfield’s pipeline projects elsewhere.
A recent Brookfield investement includes a $9 billion dollar deal to acquire Colonial Pipeline (an east-west project) in the United States. It’s no wonder that Mr. Carney might be interested in using his position as Prime Minister to keep Alberta oil in in the ground because an east-west Alberta project could implicate Brookfield’s U.S. investement.
CONCLUSION
Perhaps we can forgive a single conflict of interest incursion. Two incursions? Less likely. Three or more? C’mon!
Is it just coincidence that as the National Post headlined, "Liberal promises just keep happening to intersect with Carney's business interests"?
At the very least one might have a reasonable apprehension that Mr. Carney is acting more in line with his own self interest rather than in the best interest of Canadians. At the very least, conflict of interest questions should be front and centre in this campaign. Perhaps Mr. Carney has an miracle answer to cure conflict of interest concerns.
These conflicts do not merely intersect with the use of our taxpayer dollars, they encroach upon Canada’s ability to grow its own GDP (gross domestic product), potentially impact energy dependent Provinces and trigger serious issues as to whether any wealth generated by the Carney-Liberal plan will actually remain in Canada.
Importantly, before votes are cast, Canadians have a chance to address all candidates about trust issues. I encourage everybody to challenge Mr. Carney about his relationship with Brookfield Asset Management and other conflict of interest issues. I encourage everybody to challenge Mr. Pollievre about allegations that he is "overly Trump". I encourage everybody to challenge the NDP about how they will cost their spend-thrift campaign.
For all of you “elbows up” folks, perhaps Mr. Carney's connections with enterprises that he has a financial interest, based in Countries that are not our own, is worth a thought. To my mind, the issues surrounding Mr. Carney are so grade school obvious that maybe "elbows up" for Canada means asking a few wicked questionable little questions. Is Mr. Carney "elbows up" for Canada, or he is just elbows up for Carney?
These are my thoughts – my opinions – not yours.
David Chow
Alberta Criminal Defence Lawyer