The controversy over Finance Minister Bill Morneau’s handling of his personal finances has prompted a needed conversation about Canada’s conflict-of-interest law and the office meant to enforce it.

Clearly something is wrong. Morneau was allowed, by law and purportedly on the advice of Ottawa’s ethics watchdog, to maintain control over a large stake in his former company, even as he ran the country’s finances. It is established procedure, but not a requirement, for ministers to place their holdings in a blind trust as a way of avoiding conflicts of interest, real or perceived. That Morneau – and, we now know, at least one other in Justin Trudeau’s cabinet – did not do this is cause for real concern.

For these lapses, some have blamed loopholes in Canada’s conflict-of-interest law, some have blamed the watchdog charged with enforcing that law, and some have blamed the government for its ethical laxity. Each view has merit.

There’s no doubt the federal Conflict of Interest Act should be improved. A number of sensible tweaks have been proposed in recent weeks, the most important being the closing of the loophole that allowed Morneau to continue to “indirectly” manage his investments through a holding company. As ethics commissioner Mary Dawson has long argued, the architects of the country’s fiscal policy should not be allowed to control, even indirectly, large personal holdings. Otherwise, as this case has illustrated, the appearance of conflict is unavoidable.

The Morneau affair has also raised important questions about the role of the ethics commissioner. Some have suggested Dawson’s interpretation of the conflict-of-interest law is overly narrow, while others argue she’s too inclined to avoid controversy and reluctant to challenge officials. To be fair, such criticisms were also leveled against her predecessor, and to some extent they may be an inevitable part of such a politically charged position.

But the recent controversy also makes clear the limitations of a narrowly legalistic interpretation of the role. If Dawson told Morneau that maintaining indirect control over his investments was allowed by the letter of the law without advising him that doing so would seem to violate its spirit, she failed.

The ethics commissioner should not just be an interpreter of the act but also an adviser on ethical judgment. The government is now 19 months into its search for Dawson’s replacement. It should fill the role now with someone with a reputation not just for uprightness and skill in legal interpretation, but also for ethical reasoning and leadership and with a record of independent thought.

Still, not even the perfect law paired with the perfect watchdog would be adequate to the challenge of ensuring ethical government. Our conflict-of-interest laws will never provide answers for every ethical dilemma, nor should that be the goal. And, ultimately, the prime minister, his cabinet and other parliamentarians cannot outsource their own ethical responsibilities to a watchdog.

Take the ethical scandals dogging the Liberals. Whatever the conflict-of-interest act says about the cash-for-access fundraisers the Trudeau government for too long defended, these events clearly create the appearance of preferential access. The government should have known better. Whatever the ethics commissioner decides about the prime minister’s Yuletide getaway to the Aga Khan’s private island, the trip clearly posed both ethical and optical problems. Trudeau should not have gone. Whatever the law on ministers’ “indirect” control over their assets, Morneau’s failure to adequately separate himself from his wealth looks fishy to us. It should have looked fishy to him.

We need a better conflict-of-interest law and a watchdog who can do more than simply enforce it. But, as trust erodes and our democracy is tested, we also need moral leadership from our elected officials.

This is what Trudeau seemed to be getting at in his mandate letters to his ministers. “The arrangement of your private affairs should bear the closest public scrutiny,” he wrote, an “obligation not fully discharged by simply acting within the law.” The cynic will say that’s never going to happen, which is simply proof of just how high is the hill to climb.

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