Information & Ethics Committee on Aug. 11th, 2020

[Charlie Angus, NDP, Timmins—James Bay, ON]

Madam Chair, I'm not knocking you, but in the last two meetings you have not allowed the witness to respond to my second round. Mr. Gerretsen is new here. He's just shown up, so I don't think he should be assuming how things are done and undermining your work.

[The Chair, Conservative, Rachael Thomas]

Thank you, Mr. Angus.

[Mark Gerretsen, Liberal, Kingston and the Islands, ON]

We are all equals here, Mr. Angus.

[The Chair, Conservative, Rachael Thomas]

We'll be moving forward at this time.

Mrs. Shanahan, the floor is yours for five minutes.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

Thank you, Chair.

Actually, while we are discussing so much the finance committee, I wonder, Chair, if we could ask the clerk to ask for written copies of the testimony that has been provided to the finance committee by the witness so that we can avoid undue duplication in the future, and for any other witness who will be appearing on the same issues here at our committee.

But while we are talking about the finance committee, Mr. Shugart, on July 21 you noted, “I must say that, of course, one of the standard means of dealing with conflict of interest...is disclosure.” You went on to note that the Prime Minister's involvement with WE was well documented in the public domain and therefore was, in essence, disclosed. Can you elaborate for the committee on your thinking in this matter?

[Ian Shugart]

I have no intention of establishing any new doctrine of conflict of interest, of course, but in a situation where decisions are made and the decision-maker has an interest, a private interest, and that is not disclosed, that is an unacceptable situation because nobody can judge the basis upon which the decision has been made. Maybe it is private interests, and maybe it is public interests, but it's invisible. That's why the Conflict of Interest Act requires public office holders to declare their private interests, including their financial dealings and often what would be considered by many Canadians to be quite intimate details of their affairs and of their family. The purpose is so that the light can be shone on their interests.

That does not by itself solve all conflict situations, but it is one of the classic ways of resolving conflict of interest situations so that other parties can judge whether in fact there was a conflict, or, if there was, whether it was resolved in the public interest.

In this case, the Prime Minister was the Minister of Youth in the previous Parliament, and at the same time he had extensive background with an organization that at least in part deals with youth affairs. Therefore, it would not have come as a surprise that he would have had a relationship with WE. Whether that by itself constitutes a conflict of interest is a matter before the commissioner. I think, in his comments, the Prime Minister has indicated that he is willing to submit himself to that finding.

I simply meant that in terms of my own conduct through that period, it did not occur to me that there was a private interest here, because the Prime Minister's interest and involvement and history with WE were anything but private. They were very public. At that time, therefore, I did not say, “Prime Minister, I understand that you have a background with WE, so maybe you shouldn't be part of this conversation”, because it was a very public thing.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

Thank you. That's very helpful, especially to the motion that we have before us here today.

In further testimony, you noted, “I do not see a way that the Prime Minister or the finance minister responsible for public funds could not have had involvement in the policy development and in the approval of finances on this scale.” Now, we heard from academics yesterday who were asked about your remarks, and noted that no matter the scale of the program, conflicts still have to be considered. Can you elaborate on your remarks, particularly on why it was so important to have the first minister's input on such a significant spending approval?

[The Chair, Conservative, Rachael Thomas]

You can give a very brief answer.

[Ian Shugart]

I just think that there are certain matters of public policy that the Prime Minister as the leader of the government is of necessity going to be involved in. I think this is a conundrum that certainly we at PCO will reflect on, going forward.

[The Chair, Conservative, Rachael Thomas]

Thank you.

Madam Gaudreau, the floor is yours for two and a half minutes.

[Marie-Hélène Gaudreau, Bloc, Laurentides—Labelle, QC]

Good afternoon, Mr. Shugart.

We have received a lot of answers. Thank you for giving us more time. I would like to go back to the public aspect and explain to you why this concerns me. For a number of years, I helped not-for-profit organizations, mostly to obtain assistance. I remember clearly how complicated and difficult that could be. I also recall that, without government assistance, some organizations could not provide services.

Today, as a new member of Parliament, I have to get used to extremely strict rules. Under those rules, when one becomes an elected public figure, one is required to provide all the information at one's disposal. The rules are already complex for small organizations, but how could the government have failed in its own responsibilities, which were actually well-known to the general public? Despite the need for urgent action and the huge need for assistance, how is it that, at a minimum, the government did not follow the rules that have to be observed?

[Ian Shugart]

I do not really understand what specifically was not done.

In my opinion, with regard to the contribution agreement, the officials did their job and fulfilled their responsibilities to negotiate it.

In terms of the Cabinet decisions, it was basically a question of public policy. Students needed support. Factors were considered and an analysis of the design and implementation of the program was done The Cabinet made the decisions and the public service fulfilled its responsibilities.

[Marie-Hélène Gaudreau, Bloc, Laurentides—Labelle, QC]

Thank you.

[The Chair, Conservative, Rachael Thomas]

Mr. Angus, you have the floor for two and a half minutes.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Thank you.

When the pandemic hit, the work of the public service to me was extraordinary with people working around the clock to get this out. I feel this debacle is someplace I don't want to be. There were a lot of failures along the way.

I want to know who came up with the parameters for this program.

[Ian Shugart]

It cannot be boiled down to a person. As typically occurs, it is an organic process among political staff in ministers' offices, policy staff and officials, in this case Finance and ESDC with PCO supporting and at one point becoming more involved in the analysis.

That is typical. Also, NGOs were involved in identifying possible solutions for students and so on. So it's an amalgam.

[Charlie Angus, NDP, Timmins—James Bay, ON]

That's interesting because we dealt with so much in our office. We were talking to ministers' offices, and nobody ever suggested we had a problem with volunteerism. We had a serious problem with university students not getting jobs.

I'm not saying this as an attack on the PCO. You were given what has already been put together by ESDC. We know that Craig Kielburger had already approached Bardish Chagger. He had approached Minister Ng; Minister Morneau's office was involved. They had a first proposal, and they said no, how about a second proposal.

On April 23 the Prime Minister makes an announcement that sounds very similar to the Kielburger proposal. From that point on, it seems they are the only game in town.

I really need to know how this happened, that the Kielburger brothers who are in financial free fall can call three ministers' offices, get a proposal in, and have that proposal reflect almost what the Prime Minister's saying, and then we're moving forward with a $900-million deal.

Those parameters that made them the only game in town, to me how did those parameters...? Was it the NGO? Was it WE that came up with those parameters, working with the advice they got from the ministers: Minister Chagger, Minister Ng? Is that how this happened?

[Ian Shugart]

I think the record of testimony shows, and the documentary evidence we're providing will show, that there were various contributors to the design of the program.

[Charlie Angus, NDP, Timmins—James Bay, ON]

The Kielburgers would have been one of them because it was their proposal.

[The Chair, Conservative, Rachael Thomas]

Mr. Angus.

[Ian Shugart]

They did interact, but—

[The Chair, Conservative, Rachael Thomas]

It's time. Sorry. Thank you.

I have to give the floor to Mr. Barrett for two and a half minutes. This will be our final round: Conservatives, Liberals, Bloc Québécois and then the NDP. Again, two and a half minutes, Mr. Barrett.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

What was the total value of the contribution agreement?

[Ian Shugart]

I will speak to the program, Chair, because I don't know the exact amounts in the contribution agreement. It was in the order of $500 million that could be extended up to $900 million depending on take-up. That was the program cost.

With respect to the actual administrative costs and disbursements for various purposes, the contribution agreement itself will show that, and we're providing you with that.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

It's been said a few times that the process failed, that there are lessons to be learned, but there also have to be accountability measures in place. This was by no means a success. Who bears the responsibility for this program not launching? Who is responsible for this program? It was deemed vital during an important time, worth nearly $1 billion, brought forward to cabinet and received that approval. The contribution agreement was signed, and today we have nothing. Money's been spent; it's not been returned to the taxpayer. Who's responsible for that?