Lawyers for Stefanson, Lamont square off in court over conflict of interest allegation
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Premier Heather Stefanson’s failure to disclose the sale of real estate was inadvertent, not deliberate or calculating, her lawyer told a Manitoba Court of King’s Bench judge Monday.
“The court needs to be vigilant to ensure that applicants don’t misuse the courts and turn them into a tool to advance partisan political interests,” Jonathan Kroft said in the case brought by Liberal Leader Dougald Lamont, who has accused Stefanson of violating the province’s conflict-of-interest legislation.
Lamont’s lawyer Dave Hill asked the court to impose a 90-day suspension and a $5,000 fine over the premier’s failure to disclose the sale of three properties worth $31 million in 2016 and 2019 by McDonald Grain Co. Ltd.; she is listed as a director of the company and owner of 20 per cent of the shares.
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The Legislative Assembly and Executive Council Conflict of Interest Act requires that members file with the clerk of the legislative assembly statements within 15 days of the start of a new session that list their and their spouses’ assets and any potential conflicts. If they acquire or dispose of any assets afterward, they’re required to file a further statement within 30 days disclosing them with the clerk’s office — the only place where such records are available to the public.
“It’s important to look at the policy behind this statute,” Hill said. “It exists to ensure trust and integrity in our elected representatives and how they conduct themselves. This is a statute of the law that ensures that that happens. “
Justice Anne Turner reserved her decision after hearing arguments from both sides Monday.
Kroft told the court there’s a “danger” if the court gets too close to punishing or suspending legislators that are elected to do a job.
“Constitutional norms and principles emphasize that courts should be reluctant to interfere with the internal operation of the legislative branch,” he said.
MIKE DEAL / FREE PRESS FILES Premier Heather Stefanson has been accused of violating the province’s conflict-of-interest legislation.
Under current conflict of interest legislation, going to court is the only way to hold a legislator to account for violating the act.
And, because it is an onerous and costly process, it hasn’t been used, Lamont said.
“It’s not an easy process,” the member for St. Boniface told reporters outside the Law Courts. It’s the first time in the 38-year life of the bill that it’s been used to take a Manitoba legislator to court “because it’s so hard to prosecute.”
“I had to put together a case, hire a lawyer, prosecute it myself and pay for it all myself. If it were going to be abused, it would’ve already been.”
New legislation that goes into effect after the next provincial election (on or before Oct. 3) will remove the court from deciding on alleged conflicts. Under the Conflict of Interest (Members and Ministers) Act, only an MLA can lodge a conflict of interest complaint against another member, and they’ll have to report it to the “ethics commissioner,” who’s now called the conflict of interest commissioner.
“Even though the premier has just finished her rookie year as premier… she’s a veteran MLA.”–Lawyer Dave Hill
The ethics commissioner will have full investigative powers, including the power to compel testimony and documents, commissioner Jeffrey Schnoor said Monday.
If the ethics commissioner determines that a member has breached the act, they can recommend a penalty, ranging from a reprimand to a fine of up to $50,000, a suspension or a declaration that a member’s seat is vacant.
The Manitoba Legislative Assembly must consider the commissioner’s report within 10 sitting days after it is sent to the house Speaker and tabled. The assembly must then vote either to impose or reject the recommended penalty. No other penalty can be imposed, and that vote is final and conclusive, Schnoor said.
In Stefanson’s case that’s before the court under current conflict of interest legislation, she reported ownership of the assets before disposing of them and didn’t benefit from failing to disclose their sale, Kroft said. If she breached the act, the penalty should be on the low end of the spectrum, he told the judge.
On the high end of the penalty scale is removal from office, and that’s not what’s being sought, Hill said. He asked the judge to impose the maximum suspension of 90 days and the maximum fine of $5,000.
“Even though the premier has just finished her rookie year as premier… she’s a veteran MLA,” he told the court. He said the act has been in place since 1985 and she’s had to file disclosures every year since she was first elected 20 years ago and should’ve known better.
MIKAELA MACKENZIE / FREE PRESS FILES Liberal leader Dougald Lamont’s application further accuses Stefanson of a second breach of the act by not withdrawing from committee meetings in which she allegedly had pecuniary interest. 
Lamont’s application further accuses Stefanson of a second breach of the act by not withdrawing from committee meetings in which she allegedly had pecuniary interest.
In October 2018, Stefanson participated in a standing committee on social and economic development meeting when one of the matters under consideration was Bill 12 (Red Tape Reduction and Government Efficiency Act). It included proposed changes to the Residential Tenancies Act. Critics argued the legislation made it harder for renters to appeal increases imposed by their landlords.
At the time, Lamont objected to Stefanson’s participation, saying it would be a conflict of interest for her to vote on the matter because of her connection to rental properties held by McDonald Grain. Then-premier Brian Pallister responded by saying when there are issues that apply broadly to thousands of Manitobans, members shouldn’t be disqualified from voting.
A member who is a landlord isn’t in a conflict when they vote on amendments to the Residential Tenancies Act, Pallister argued, in the same way a member who is a farmer wouldn’t be in a conflict of interest if they voted on a piece of legislation that impacts agriculture.
In court Monday, the premier’s lawyer said recusing herself from the matter would’ve been “absurd” and compared that to telling an MLA with a vehicle who drives they couldn’t vote on legislation concerning motor vehicles.
carol.sanders@freepress.mb.ca
Carol Sanders
Legislature reporter
After 20 years of reporting on the growing diversity of people calling Manitoba home, Carol moved to the legislature bureau in early 2020.
