The Carney affair – Canadian Government Executive

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February 4, 2013

The Carney affair

The news of Mark Carney’s nomination as the new Governor of the Bank of England was greeted in Canada with a sense of astonishment and pride. Very quickly, however, the story took a sharp turn when it was revealed in the national media that Carney had been involved in private conversations with individuals who tried to convince him to abandon his banking career and seek the leadership of the Liberal Party of Canada.

In general, the comments revolved around the appropriateness of the Governor exploring a political career as a leader of an opposition party while serving in office and whether a family vacation at the home of the Liberal finance critic might bias his decision-making.

The context of these remarks revolves around a well-established principle in Canada that the public service is, foremost, professional and non-partisan. That means that appointments to the public service are merit based and are independent of political or partisan considerations. These attributes are seen as central to the Canadian system of government.

In such a system it is essential that there be a deep understanding of what this entails since debates about political activities often lead to much heat and little light. How wise that we have in place an explicit framework in which to consider the reasonableness of the actions of public servants. Interestingly, these rules have largely escaped the attention of the media.

To ensure impartiality, the rules for the core public service regarding partisanship are clear and well articulated in Part 7 of the Public Service Employment Act which states, “an employee may engage in any political activity so long as it does not impair, or is not perceived as impairing, the employee’s ability to perform his or her duties in a politically impartial manner.”

There are, however, a different set of rules for higher-ranking officials known as “public office holders” that include judges, deputy ministers, ambassadors, and a wide range of other appointees including the Governor of the Bank of Canada.

With regard to this current controversy, a public office holder is governed principally by considerations that are contained in Annex A of Accountable Government: A Guide for Ministers and Ministers of State (2011). In the Annex, the guide states the following: first, “public office holders shall act with honesty and uphold the highest ethical standards so that public confidence and trust in the integrity, objectivity and impartiality of the government are conserved and enhanced.” Second, “they must perform their official duties and arrange their private affairs in a manner that will bear the closest public scrutiny.” And, third, “they shall make decisions in the public interest and with regard to the merits of each case.”

These guidelines are grounded in one general principle: that a public office holder “should not participate in a political activity that … would cast doubt on the integrity or impartiality of the office.” To give more precision, political activities are defined as “seeking nomination to run as a candidate … in an election of any level of government in Canada.” It is important to note that the code explicitly states that it does not include activities such as “expressing partisan views in a private setting.”

For completeness, it is worth noting that two other codes also cover the behaviour of a public office holder such as the Bank Governor. The first is the Conflict of Interest Code administered by the Ethics Counsellor and the second is the Bank of Canada’s own Conflict of Interest Guidelines.

After a careful reading of the four codes that govern the behaviour of Governor in Council appointees, all the information suggests that the Governor of the Bank of Canada did not break any of the four codes that speak to conflicts of interest. At the very most, he may have erred in not notifying the conflict of interest officers in the Bank of Canada or in the office of the Ethics Commissioner of his vacation plans to visit an opposition member of Parliament. His private conversations are his own and should not be of interest to interested media.

In the end, Carney will most likely regret having agreed to chat with people who did not respect his privacy and did not appreciate the awkward position in which he would be placed when they disclosed to the media the nature of their entreaties to him.

David Zussman holds the Jarislowsky Chair in Public Sector Management at the University of Ottawa (dzussman@uottawa.ca).

About this author

David Zussman

David Zussman

David Zussman is a senior fellow in the Graduate School of Public and International Affairs at the University of Ottawa and is a Research Advisor to the Public Sector Practice of Deloitte.

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