Information & Ethics Committee on Aug. 11th, 2020

[Ian Shugart]

There is a preliminary period during which officials from Employment and Social Development Canada, or ESDC, and the Department of Finance outline the program and develop the details. I don't have the specific dates right now, but at some point during that period, officials from the Privy Council Office were informed and invited to take part in the conversations. In terms of overall development of the program, the details were becoming more and more established, and the discussions more detailed.

The role of the Privy Council Office is to prepare elements of the proposal for consideration by the Special Committee on the COVID-19 Pandemic and, ultimately, by cabinet.

[Élisabeth Brière, Liberal, Sherbrooke, QC]

Thank you.

You mentioned that, in the circumstances, it was justified to proceed with a contribution agreement, which is a standard tool, rather than a tendering process.

Today, can you tell us why it was justified?

[Ian Shugart]

It's a standard mechanism for working with a—

third party to deliver a program. It was already determined at that point that the elements of the program required a third party, and therefore a contribution agreement would be required. The contribution agreement itself follows the broad lines of any contribution agreement. There are standard clauses. There's a template for contribution agreements to ensure financial probity and results for Canadians, and that took some time to develop, as it always does. The more sophisticated or complex, and the larger scale of program, the more detailed the contribution agreement will be. That procedure was followed when it became clear that the department did not have the internal capacity to deliver the program that was being designed.

[Élisabeth Brière, Liberal, Sherbrooke, QC]

When you were appointed, you said that it was your responsibility to advise ministers, and to tell them the good news and the bad news. Under both Mr. Harper's government and that of Mr. Trudeau, you have always considered it your duty to tell the truth and to give them the best possible advice. I believe you expect the same from all deputy ministers in the government.

Along the way, if you had doubted that WE Charity was the best option, would you have said so?

[Ian Shugart]

Yes.

I wouldn't have said it personally. That was the opinion of senior officials at Employment and Social Development Canada. I didn't give that advice myself, but it was already the opinion of senior officials at ESDC at the time.

[Élisabeth Brière, Liberal, Sherbrooke, QC]

Okay, but I would like some clarification on your sense of duty and your responsibility to always advise ministers to the best of your ability.

[Ian Shugart]

This is absolutely consistent with the duties of public servants to consider options and to respond to ministers' requests in light of established program development preferences. That's normal and that's what was done in this case. The advice and analysis of senior officials was provided to ministers as usual.

[Élisabeth Brière, Liberal, Sherbrooke, QC]

In the Privy Council Office are there mechanisms, such as due diligence procedures, in place to identify areas of concern and potential conflicts of interest?

[Ian Shugart]

Everything is based on the Conflict of Interest Act. As the committee knows, it is the responsibility of individuals to make their business known to the commissioner. If the commissioner deems that action is necessary, it's the responsibility of senior officials or ministers—

[The Chair, Conservative, Rachael Thomas]

I'm sorry, that's time. Thank you.

[Élisabeth Brière, Liberal, Sherbrooke, QC]

Thank you.

[The Chair, Conservative, Rachael Thomas]

We'll move to Mr. Fortin for six minutes.

[Rhéal Fortin, Bloc, Rivière-du-Nord, QC]

Thank you, Madam Chair.

Good afternoon, Mr. Shugart.

With respect to the due diligence of WE Charity, you said earlier that Mr. Trudeau had not inquired about this, but that he assumed the officials had.

Can you tell us exactly what due diligence was done on WE Charity's activities?

[Ian Shugart]

I indicated earlier that the due diligence had to do with the organization's ability to deliver the program. Other issues related to the organization, such as those related to the board of directors, were not considered at that time.

[Rhéal Fortin, Bloc, Rivière-du-Nord, QC]

In terms of the financial aspect, was the creditworthiness of WE Charity checked?

[Ian Shugart]

No, because senior officials said that they had dealt with the organization before, that there was a track record. The content of the contribution mechanism is specific enough to determine that expenditures, for instance, are well managed. This kind of due diligence also assesses the organization's ability to deliver the program and interact with citizens, among other things.

[Rhéal Fortin, Bloc, Rivière-du-Nord, QC]

I don't mean to be rude, Mr. Shugart, but we have so little time that I feel compelled to corner you. Please excuse me. You said that this organization has an established track record and that it was enough to judge them on it. What was the duration of the track record of WE Charity that reassured you?

[Ian Shugart]

I’m afraid I don’t know the details of that. The department had worked with the charity on other occasions. They knew them well.

[Rhéal Fortin, Bloc, Rivière-du-Nord, QC]

Do you know that the contribution agreement was not given to WE Charity, but rather to the WE Charity Foundation?

[Ian Shugart]

Yes, I learned that recently.

[Rhéal Fortin, Bloc, Rivière-du-Nord, QC]

Do you know how long the WE Charity Foundation has been incorporated?

[Ian Shugart]

No.

[Rhéal Fortin, Bloc, Rivière-du-Nord, QC]

Do you know how solvent the WE Charity Foundation was and how many assets it had, among other things?

[Ian Shugart]

I only know that in conversations between ESDC officials and WE Charity people, it was determined, partly for administrative reasons, that the WE Charity Foundation was the best vehicle.

[Rhéal Fortin, Bloc, Rivière-du-Nord, QC]

I don't know the exact figure off the top of my head, but WE Charity had liabilities of a few tens of millions of dollars.

Did you know that?