A senior civil servant has been charged following an "exhaustive" 14-month probe into the income trust investigation that helped turn the tide of the last federal election campaign.
Serge Nadeau, general director of tax policy and analysis at the federal Department of Finance, was charged with criminal breach of trust on Thursday.
"It is alleged that he used confidential Government of Canada information for the purchase of securities which gave him a personal benefit," the Royal Canadian Mounted Police said in a statement.
The Mounties found no evidence, however, that anyone benefited from an alleged government leak.
Nadeau, 50, has been suspended without pay pending the outcome of the case, Department of Finance spokesperson David Gamble told CTV reporter David Akin in an email.
"The Department of Finance has co-operated fully with the RCMP throughout its investigation," wrote Gamble. "This issue is now before the courts and the department will not have further comment on the case until due process has been completed."
On Nov. 23, 2005, trading of income trusts and related stocks spiked hours before an anticipated announcement by then-finance minister Ralph Goodale.
The NDP requested the Mounties probe allegations that Liberal partisans in Paul Martin's government may have given markets advance notice of measures on trusts, sparking insider trading on Bay Street.
In December, 2005, the RCMP began their probe, following a preliminary review of the allegations.
The Liberals denied that anyone in the finance minister's office leaked information about the tax announcement before it was made.
The Liberal Party welcomed the conclusion of the RCMP investigation.
"The RCMP income trust investigation exonerates the Liberal Party of Canada and shows that the Conservative and NDP allegations of a politically-motivated leak were false," said Liberal Leader Stephane Dion in a news release.
In a separate release, Goodale stated: "The investigation has indicated no involvement in this matter by me, my staff or any other political person."
But in 2005, in the middle of an election campaign, news that Mounties were investigating the matter had a devastating impact on the Liberals, who were already struggling under the weight of the Quebec sponsorship scandal inherited from the previous Liberal government under Jean Chretien.
The Liberals' tenuous lead in the opinion polls disappeared almost overnight, and the Tories under Stephen Harper began their climb that brought them to power.
Goodale's big announcement was that he was reversing his earlier plan to tax income trusts. The news was good for income trust investors and those who buy dividend-paying stocks.
But that changed in October, 2006, when Harper's Conservative government announced a hefty tax on trusts which effectively killed any advantage offered by the investment vehicles.
The move brought harsh criticism on Harper and Finance Minister Jim Flaherty, who were accused of reneging on a campaign promise never to tax the popular investment vehicles.
Flaherty said he had no choice but to move on the tax issue because he feared that increasing numbers of corporations preparing to convert to trusts threatened Ottawa's tax base and ran counter to the productivity and competitiveness plan he has in the works for Canada.
Flaherty on Thursday rejected the notion Goodale was improperly accused.
"If Mr. Goodale wants an apology he should go to the RCMP and ask them whether they're still investigating him," he told reporters outside the House. "This is a police matter."
Earlier this week, the Tories released a series of attack ads in French, one of which mentions Goodale. The ad, called "TV Vente," suggests Canada will end up in the poor house under Liberal rule, invoking past allegations against the party including the income trust leak from Goodale's department.
"La GRC enquete sur l'entourage de Goodale (The RCMP investigates Goodale's entourage)," reads a headline in the ad.
Dion reacted to the ad today in his news release. "The Prime Minister should immediately ask that his party withdraw their French attack ad that smears the reputation of the Honourable Ralph Goodale," said Dion.
Nadeau has not responded to the breach of trust charge -- an indictable offence with a maximum penalty of imprisonment for up to five years.
No other charges have been laid in the matter.
"The RCMP works to maintain confidence in Canadian markets by preventing, detecting and deterring crimes that affect the Canadian economy," said the Mounties in a statement. "The RCMP has conducted an exhaustive investigation. The investigation into the income trusts matter is now concluded."
