Martin confirms PMO had advance knowledge of income trust decision

Paul Martin said he and some other people in the Prime Minister's Office had advance knowledge of a government decision on income trusts before it was made public, something he says isn't out of the ordinary.

The RCMP is investigating opposition allegations the decision on tax policy regarding income trusts was leaked prior to its Nov. 23 announcement. Opposition politicians point to a flurry of market trading in the hours before the announcement and claim inside information benefited Liberal-friendly traders and investors.

Martin, who spoke following a campaign stop at a Montreal-area mosque, said he was one of a number of people in the PMO who were informed of the decision before it was made public.

"I knew and I'm one of them. The fact is, that the people who would be on a need-to-know basis would have that information," said Martin.

When asked if the alleged leak could have come from the PMO, the prime minister didn't give a direct answer.

"The fact is we are dealing with opposition allegations. And that's all we are dealing with. Opposition allegations during an election campaign," said Martin. "The RCMP obviously have a responsibility to follow up on matters such as this. That's their job."

Martin said he believes the spike in trading is simply a reflection of how markets operate.

"There are a lot of people who are essentially ... saying out there that what you're dealing with is ... simply the way that ... markets function," said the prime minister.

He repeated his defence of Finance Minister Ralph Goodale, saying he doesn't need to step down from his cabinet post because the RCMP have not indicated the finance minister is under investigation.

But NDP Leader Jack Layton said Goodale must resign.

"That would send a strong signal of responsibility and doing the appropriate thing," said Layton.

Conservative Leader Stephen Harper, who has also called for Goodale to step down, declined to comment during a stop in Ottawa, saying instead he was going to let the Liberals "explain it for a while. "