Evidence of meeting #12 for Access to Information, Privacy and Ethics in the 43rd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was charity.
A video is available from Parliament.
Bloc
Rhéal Fortin Bloc Rivière-du-Nord, QC
However, we agree that he could be in a conflict of interest, even if these facts were known, right?
Clerk of the Privy Council and Secretary to the Cabinet, Privy Council Office
I was talking about the involvement, the Prime Minister's own past relationship with the organization. The family aspect wasn't necessarily raised.
Bloc
Rhéal Fortin Bloc Rivière-du-Nord, QC
All right. Anyway, you aren't here as an expert on ethics. I don't want to bother you with pointed questions. We're going to proceed with facts.
Earlier, I asked you a question that I don't think you really answered. I asked you how often the federal government gives a $43.5 million contract to an organization that turns out to be an empty shell, an organization that has no known track record, has been incorporated for a year or two and has no assets, to manage $900 million.
Have you ever seen that before?
Clerk of the Privy Council and Secretary to the Cabinet, Privy Council Office
No, I cannot say it is common, but I can say that the procedures followed with the organization in order to ensure a solid contribution agreement are common. In fact, they're standard.
Bloc
Rhéal Fortin Bloc Rivière-du-Nord, QC
Okay. Thank you, but you've already said that. I'm not saying it's not important, Mr. Shugart, but I only have two minutes, and I have one last question for you.
You said that you came to the conclusion that the public service couldn't run this program. How did you come that conclusion?
Clerk of the Privy Council and Secretary to the Cabinet, Privy Council Office
That was the reasoned opinion of the officials at the department responsible.
Clerk of the Privy Council and Secretary to the Cabinet, Privy Council Office
As the committee said, they were officials at Employment and Social Development Canada, including the—
Bloc
Rhéal Fortin Bloc Rivière-du-Nord, QC
Could you give us the name of a person who said that at one point?
Clerk of the Privy Council and Secretary to the Cabinet, Privy Council Office
Yes.
Clerk of the Privy Council and Secretary to the Cabinet, Privy Council Office
Ms. Wernick was identified as being responsible, and she presented the facts to the committee.
Bloc
Rhéal Fortin Bloc Rivière-du-Nord, QC
So it's Ms. Wernick who decided that the public service couldn't run—
Conservative
The Chair Conservative Rachael Thomas
Mr. Shugart and Mr. Fortin, that's your time. Thank you.
Mr. Angus, you have the floor for two and a half minutes.
Charlie Angus NDP Timmins—James Bay, ON
I thank you for your service.
Clearly, something went terribly wrong here. The second this program was announced, it fell apart, and it fell apart on the obvious connections between the Prime Minister's family and the Kielburgers.
That question of conflict of interest was the first question. That's before we learned that they were setting up a shell company that had no assets. That's before we learned that they'd fired their board. That's before we learned that the Prime Minister's family was getting paid when the board was being told they weren't. It was a question of conflict of interest.
I'm not saying that it's your job, but given that your predecessor lost his job in the last ethics scandal, it had to be someone's job to raise this as an obvious red flag. Who in the Prime Minister's Office raises a red flag of this significance, so that you and everybody involved would not be blindsided when this came out? Whose job was that?
Clerk of the Privy Council and Secretary to the Cabinet, Privy Council Office
Well, I think, Chair, that Ms. Telford indicated to the finance committee that she raised the question of wanting to be absolutely certain that this was done in an appropriate way and everything was above board, given the relationship, the history, that the Prime Minister had. That was in this case, and the due diligence proceeded as we have described—
NDP
Clerk of the Privy Council and Secretary to the Cabinet, Privy Council Office
She indicated that she was the one who raised the question, but I—
NDP
Charlie Angus NDP Timmins—James Bay, ON
That's a good question. I only have two minutes here.
The other question I have—obviously, this thing fell apart—is on this line that only WE had the capacity to deliver a project of close to a billion dollars. Now, we get different numbers—$530 million, $43 million, $912 million—but I'm looking at WE's record with the government: $40,000 for a contract, $24,990, $24,996, $17,050, $13,374. Then there are a few contribution agreements, and the highest is $3 million.
How in anybody's world, looking at WE's record with these penny ante contracts, could you have signed off and said, “I think we can give these guys $912 million and we're not going to have any problems”? That alone, without asking the questions about why they had to set up a shell company and the fact that they were in financial free fall when they came to the government for the money.... They don't have a track record of doing this—
Conservative
The Chair Conservative Rachael Thomas
Mr. Angus, that's time. We're going to let that hang. I'm sorry.
Conservative
Conservative
Damien Kurek Conservative Battle River—Crowfoot, AB
Thank you very much, Madam Chair.
Thank you, Mr. Shugart. I appreciate your coming and the forthrightness with which you started your testimony.
Is it still reasonable to state that only WE could deliver this program, when it actually couldn't deliver the program in either official language and there were other issues with the program being delivered in different parts of the country?
Clerk of the Privy Council and Secretary to the Cabinet, Privy Council Office
As I indicated, Chair, I have not seen anything that would indicate that if the program had proceeded and were in operation today the WE organization would not be able to deliver it. When you examine the contribution agreement, including the nature of having to report against objectives and milestones.... Yes, things fell apart, but not for any demonstrated inability of the organization to deliver the program.
Conservative
Damien Kurek Conservative Battle River—Crowfoot, AB
Yet the program is not being delivered.
Specifically, regarding delivery, was there ever a question asked about whether or not WE could deliver programs effectively in rural Canada, yes or no?