Canada’s Conflict of Interest Act is again under fire as the House of Commons ethics committee warns that loopholes continue to allow behaviour that is legally permissible but ethically questionable. Critics say the law remains too weak to prevent public officials from influencing decisions that could benefit them financially.

The committee’s renewed scrutiny follows repeated calls for reform dating back to 2023, when experts highlighted how the legislation lets senior officials shape policies that indirectly affect their interests. Central to those concerns is the “general application” exemption, which allows officials to participate in decisions that impact a broad group rather than a specific entity. Because most cabinet decisions fall under this category, conflict-of-interest restrictions rarely apply. The Act’s vague definitions of “controlled assets” and expanded thresholds for what must be disclosed have also raised concerns about selective transparency.

Prime Minister Mark Carney’s financial relationship with Brookfield Asset Management has become the most visible example of these grey areas. Carney holds a carried interest in Brookfield’s global transition fund, a position that could lead to future financial gains linked to government decisions. Although he has placed assets in a blind trust and established an ethics screen to prevent direct involvement in matters tied to Brookfield, the law still permits him to participate in decisions with sector-wide impacts.

The issue is now central to the debate over the new Build Canada Homes initiative, a $13-billion program to accelerate modular housing construction. Brookfield has links to modular and prefabricated building operations, and critics argue the program could indirectly benefit the company even without formal contracts. Because the project is framed as a broad policy affecting the housing sector, Carney’s involvement remains within legal bounds.

The ethics committee says this case highlights how existing legislation can fail to prevent perceived conflicts. While procedural changes were introduced in 2023, they stopped short of significant reform. Without stronger definitions, tighter recusal requirements and greater transparency, critics warn the law will continue to permit behaviour that undermines public trust, even if it does not break the rules.