Prime Minister Justin Trudeau did not breach the Conflict of Interest Act over failing to recuse himself from cabinet discussions to have WE Charity operate a federal student-volunteer program, Canada's ethics watchdog say in a report released Thursday.

In a separate report, federal ethics commissioner Mario Dion found that former finance minister Bill Morneau did violate the rules and should have recused himself.

He says Morneau ``gave WE preferential treatment by permitting his ministerial staff to disproportionately assist it when it sought federal funding.''

Dion says he was asked to investigate Morneau by several MPs because of what some believed to be close ties between his family and the charity, founded by brothers Marc and Craig Kielburger.

He found Craig Kielburger fell under his office's definition of a friend to Morneau, which meant the former minister should have known it created the potential for conflict.

Dion says during Morneau's participation in discussions around the student-volunteer program he ``placed himself in a conflict of interest on several occasions.''