Manitoba premier seeks no penalty or small fine if court finds she broke conflict of interest rules

Premier Heather Stefanson says she ought to face "a nominal fine" or no penalty at all if a court decides she violated provincial conflict of interest rules.

Anything more severe, her lawyers argue in advance of a hearing slated for Monday, could encourage her political rivals to try to use the courts for political advantage.

On Feb. 13, Manitoba's Court of King's Bench will hold a hearing to determine whether Stefanson contravened conflict of interest legislation when she did not promptly disclose $31 million worth of real estate sales by a company that listed her as a director.

Liberal Leader Dougald Lamont launched the civil lawsuit in 2022, after Stefanson apologized for failing to submit disclosure paperwork following the sale of three Winnipeg properties owned by McDonald Grain Company Ltd., a real estate holding company.

In a brief filed in January, Lamont's lawyer David Hill argued Stefanson should be suspended for 90 days and fined $5,000 if the judge determines she violated provincial conflict of interest rules.

In a response filed earlier this week, Stefanson lawyers Jonathan Kroft and Amber Harms argue there should be no penalty at all or only a small fine if the court determines she contravened Manitoba's Conflict of Interest Act.

"It is respectfully submitted that, even if the act requires a penalty, it would not be in the public interest to grant anything more than a nominal fine. Such a penalty is appropriate in the absence of any evidence of bad faith and because the alleged violations are minor and without negative public consequence," Kroft and Harms stated in the brief.

"Moreover, imposition of a larger penalty would encourage rival politicians to attempt to use the courts as a tool to gain partisan political advantage in the legislative and electoral processes. The courts have traditionally and wisely avoided such political involvement."

The transactions at the centre of the lawsuit took place in 2016 and 2019, before Stefanson, the MLA for Tuxedo, became Manitoba's premier.

The province's Conflict of Interest Act states MLAs must notify the clerk of the legislative assembly within 30 days if they dispose of any asset.

Stefanson told reporters in January 2022 she did not submit the paperwork within the required 30 days. In an affidavit filed in November, she said she was not aware of the oversight until journalists raised questions about the property sales.

She also said her failure to promptly disclose the documents was inadvertent and thus did not constitute a violation of the act.

New rules won't allow courts to weigh in

In her latest brief, her lawyers noted Manitoba's existing conflict of interest rules will be replaced after the next provincial election with new provisions that won't allow courts to make decisions with political implications.

"The new legislation will take the responsibility for dealing with alleged conflicts of interest of members away from the judicial branch and move that responsibility back to the legislative branch," Kroft and Harms wrote.

"This is consistent with the long-recognized constitutional principle of separation of powers among the judicial and legislative branches of government."

In a statement, Lamont said the premier should be subject to the existing legislation.

"MLAs have a legal obligation to disclose when they make a major business deal, and Manitobans have a right to know. That's not just a guideline, it's the law," he said in a statement.

There is no precedent for suspending a premier over conflict of interest rules. In January, University of Manitoba political studies professor emeritus Paul Thomas described Lamont's request for a suspension as a "nuclear option."