Angry in the Great White North
The Income Trust Scandal: Goodale's secret meeting included his good friend
Wednesday, January 04, 2006 at 12:17 PM

Read other posts by Steve Janke published by the National Post
Leader

donald_photo.jpg Donald W Black, good friend of Ralph Goodale

Update: Check out Stephen Taylor's review of just how honest Ralph Goodale has been over the years, including some new insights into the cosy relationship between Ralph Goodale and Donald Black. Some of that information has been added below.

We all know, after some initial denials, that Ralph Goodale met with the Investment Dealers Association just hours before letting the rest of us know that income trusts weren't going to be taxed (too late, of course, for the rest of us to do anything about it):

Finance Minister Ralph Goodale had an hour-long meeting with senior representatives of Canada's investment community -- at which the issue of income trusts was discussed -- only hours before his decision on the issue was announced, CanWest News Service has learned.

An official in Mr. Goodale's office confirmed yesterday that the previously undisclosed meeting with the executive committee of the Investment Dealers Association of Canada (IDA) took place, but said those who attended left the morning meeting "no wiser" about the decision that was announced later that day after markets closed. [emphasis added]

Of course, Goodale's people insist it was all on the up-and-up:

"There was a very vague, very general discussion," [John Embury, Mr. Goodale's director of communications,] said, adding it dealt with the association's planned submission on the income trusts issue. "They left the meeting no wiser than when they came through the door."

Really?

Let's look at who would have been at this important meeting. I have a source who tells me Donald Black was at the meeting. Donald Black is a director at the IDA:

Donald W. Black, C.M.
Chief Executive Officer
Greystone Managed Investments Inc.

Greystone manages funds, including this fund, Hartford Growth and Income Fund (D), that invests heavily in income trusts:

Top Holdings as of Nov 30, 2005
TSX Group: 4.32%
Canadian Oil Sands Trust: 4.16% [income trust]
Bank of Montreal: 4.12%
Fortis Inc.: 4.00%
Great-West Lifeco: 3.99%
Canadian National Railway: 3.96%
Royal Bank of Canada: 3.93%
AltaGas Income Trust: 3.92% [income trust]
IGM Financial: 3.90%
Bank of Nova Scotia: 3.86%

I guess that's why he was at the meeting. Of course, Black is particularly eager to make sure that Greystone thrives:

Based in Regina, with offices in Edmonton and Winnipeg, Greystone offers a full range of investment products and services to a national clientele. Greystone is majority owned by its employees, more than half of who are shareholders.

So who is Donald Black? Just what are his links to Ralph Goodale and the Liberal Party?

In December 2003, following the advice of Prime Minister Paul Martin, Black was made a member of the Order of Canada:

A distinguished leader in the Canadian financial services sector, Donald Black has been instrumental in restructuring many large companies and redirecting them to financial profitability. Equally committed to the welfare of his community, he has given generously of his time and expertise in support of a myriad of charitable, healthcare and educational organizations. A long-time supporter of the United Way of Regina, he created and sustained its Leadership Giving Program. In addition, the Hospitals of Regina Foundation Inc., the Saskatchewan Indian Federated College and the CNIB have benefited from his dedication and leadership.

He is also Ralph Goodale's good friend and a generous contributor to Goodale's campaigns (see this update as well). They worked together at Agriculture and Agri-Food Canada, and Goodale helped him out in getting this plum patronage appointment:

OTTAWA NOTEBOOK
October 29, 1998
Western Producer Barry Wilson

Regina investment manager Donald Black has been re-appointed chair of the Farm Credit Corp. for a second three-year term. It is a part-time position for the president of Greystone Management Inc. When he was appointed in 1995, the announcement was greeted with some skepticism by opposition politicians because Black was a friend of then-agriculture minister Ralph Goodale. [emphasis added]

His re-appointment was made by Goodale's successor, Lyle Vanclief. The minister praised Black as "a strong proponent of corporate governance" who has helped create the rules that separate the duties of the FCC management from the responsibilities of the directors.

Of course, that plum appointment was a return for Black helping out Goodale (see Stephen Taylor for a longer history):

So, how close are Goodale and Black? Greystone Capital Management is based out of Regina, Saskatchewan. Black ran Pioneer Life Insurance and gave Goodale a senior position in the firm during his brief stint in the private sector [1988-1993]. According to some sources, Goodale was appointed this senior position to allow the now Minister of Finance to continue working on his political ambitions.

No wonder the opposition squawked in 1995. Can you blame them for not trusting these two to be in the same room together and not exchange favours?

I wonder if the skepticism the opposition members voiced in 1995 when Donald Black got this little plum from Ralph Goodale will be repeated when they realize he was in that critical income trust fund meeting ten years later?

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