Mark Carney will face a grilling from British MPs over his political ambitions and leanings after revelations the next Bank of England governor was recently courted by Liberals to run for leader and that he and his family holidayed at the party finance critic's seaside home in Nova Scotia.
British parliamentarians had already planned a preappointment hearing for Canada's central banker next year, but Conservative MPs in the U.K. said on Monday they now have questions about Mr. Carney's political colours and his decision to accept hospitality from Canadian Liberal member of Parliament Scott Brison.
Andrew Tyrie, the Tory chairman of the Treasury Select Committee, told the Times of London on Monday: "My colleagues will want to address every such issue at the preappointment hearing." Mr. Carney announced in late November that he is leaving his Bank of Canada governorship early to take the helm of the Bank of England on July 1, 2013.
Separately, the Bank of Canada revealed on Monday that in the past few weeks, it launched a conflict-of-interest review of the Carney family visit to Mr. Brison's home in Cheverie, N.S., ultimately clearing him for accepting this hospitality because the pair are "personal friends" and the stay was during "personal vacation time." It said it undertook the assessment only after questions from The Globe and Mail on Nov. 29.
The Cheverie stay of about one week occurred, The Globe and Mail reported on Saturday, while members of the Liberal Party were mounting an effort to recruit the public servant as a leadership candidate.
Canadian Finance Minister Jim Flaherty declined to defend Mr. Carney on Monday when asked by a journalist whether the central banker had overstepped his bounds.
"I usually have comments on everything, but I have no comment on any of that," Mr. Flaherty said. Mr. Flaherty is a member of the Harper government cabinet that approved the central banker's appointment about five years ago.
Some British Conservative MPs who want Britain to adopt a more aggressive monetary policy expressed concern to The Times on Monday about Mr. Carney's conversations with Canadian Liberal Party members.
Mark Field, the Tory MP for the City of London, said: "Now we know he's a liberal, there seems no doubt that it will be 'business as usual' for interest rates right through until 2015."
Jacob Rees-Mogg, the Somerset Tory MP, told The Times: "There is a risk on being open about your place on the political spectrum. Having someone with known political views in a nominally apolitical job can lead to disagreements."
The Globe reported on Saturday that interviews with dozens of Liberal sources showed Mr. Carney's boosters were trying to put together a team of organizers and supporters this summer in the hope of fielding a fiscally conservative and credible alternative to Liberal MP Justin Trudeau. Sources said two of the key backers were former New Brunswick Liberal premier Frank McKenna and Toronto lawyer Tim Murphy, who was chief of staff to prime minister Paul Martin.
Mr. Carney said he did not ask anyone to do anything on his behalf – "I never made an outgoing phone call" – but Liberal sources added that he asked questions about a potential bid, fuelling the sense that he was interested in a transition to politics. The central banker decided to stay out of the Liberal race and went on to accept a plum new job in England, knowing that it would be hard to jump into the partisan arena directly from his Bank of Canada post.
On Monday, the Official Opposition NDP pointed out that its finance critic, Peggy Nash, could get a phone call from the Bank of Canada governor only when she asked for a meeting. Ms. Nash has never socialized with Mr. Carney.
The central bank said its in-house lawyer found nothing wrong with the Carney family vacation on the west coast of Nova Scotia. The stay followed a July speech to East Coast elites organized by Mr. McKenna.
"General counsel was consulted when inquiries as to the nature of the visit arose," bank spokesman Jeremy Harrison said.
"Mr. Brison and governor Carney are personal friends, and have been so for about a decade. The visit was part of the governor's and his family's personal vacation time."
Mr. Harrison said it was acceptable for Mr. Carney to stay with the Liberal MP because Mr. Brison does not have a commercial or business relationship with the bank.
"Mr. Carney's acceptance of hospitality provided by a personal friend does not arise out of 'activities associated with official bank duties,'" he said.
"Nor can it be defined as partisan or political activity."
The bank's conflict of interest policy says employees must avoid "the appearance of impropriety" as well as "avoiding actual impropriety." It advises central bank staff to ask themselves "does it feel right" when deciding whether to accept hospitality or gifts or other benefits – and to consider: "Is there an alternative action that would not pose an ethical conflict?"
The Bank of Canada said Mr. Carney is in the clear.
"The Bank of Canada's general counsel, who is responsible for enforcing the bank's conflict of interest policy, has assessed that this visit does not breach the bank's conflict of interest guidelines in any way," Mr. Harrison said.
"Neither the Bank of Canada, nor governor Carney, have an actual or potential commercial or business relationship with Mr. Brison."
With a report from Bill Curry