Information & Ethics Committee on Aug. 11th, 2020

[Jacques Gourde, Conservative, Lévis—Lotbinière, QC]

Thank you, Madam Chair.

I, too, would like to congratulate you, Mr. Shugart, for 40 years of service. Bravo!

Something intrigues me. Around the end of April, when you first met with the Prime Minister, how many scenarios did you present to him for delivering the Canada student service grant?

[Ian Shugart]

If I remember correctly, I wasn't at that meeting, but all the programs for students were discussed. That included the items announced by the Prime Minister, but not the program that received the most attention. At that point, guidelines were established but not determined. There was a lot of detail that needed to be clarified at that point.

[Jacques Gourde, Conservative, Lévis—Lotbinière, QC]

During the COVID-19 crisis, the government has introduced many initiatives to help Canadians, but where did the idea for the Canada student service grant come from? Was it a political directive or was it a response to advice from government departments to the Prime Minister? Was it the Prime Minister or cabinet that asked for this initiative?

[Ian Shugart]

I'd say it was a combination of things as to the will. In terms of personal goals—

[Jacques Gourde, Conservative, Lévis—Lotbinière, QC]

Was it political will?

[Ian Shugart]

I understand your question. However, when staff in the ministers' offices and the public servants spoke, they found a problem.

There's been an explosion of ideas about what's possible. There has been a kind of back and forth that is typical of program development in any field. At that time, there were discussions between the office of the Minister of Finance, the office of the Prime Minister, ESDC and public servants.

[Jacques Gourde, Conservative, Lévis—Lotbinière, QC]

Thank you, Mr. Shugart.

On the same day the Prime Minister announced the initiative, the media informed us that WE Charity was already ready to apply.

Were other organizations able to apply for the program? IS WE Charity the only organization that got the information before the Prime Minister announced the initiative?

[Ian Shugart]

At that time, there was no established program. Of course, WE Charity passed on its ideas, but it wasn't a competition. The offer to manage the program wasn't made to WE Charity.

At that point there was no program. It was still being developed, but it has been established that WE contributed ideas at that point.

[Jacques Gourde, Conservative, Lévis—Lotbinière, QC]

WE Charity contributed so well to the development of the program that its recommendations and expertise were drawn upon. The program was tailor-made for WE Charity, and therefore, indirectly, only WE Charity was able to deploy the program, since it was tailor-made for it.

By the way, this is a unilingual anglophone organization that could not deploy the program in Quebec, where it had no base. You used a third party to set up a program that uses a third party to deploy it in provinces where it has no base. Was it really due diligence to think that WE Charity was the only one that could deliver the program?

The Prime Minister said that senior officials—and, indirectly, you—told him that it was the only organization that could do it, but it was the same organization that developed the program.

[Ian Shugart]

I will say again, Chair, that the development of this program took place over a period of time. When WE submitted their ideas—and they submitted more than one idea—one proposal they made was not accepted by the government. The government said, “No, not that program. We're not interested in that.”

The development of this program, like that of any program, was organic. It was formed on the basis of first determining what features were needed, what problem was being solved. Ideas came from many quarters, and ultimately the program took shape. As it took shape, and as the features of the program became clear, it also became clear that a third party would be needed to develop the program, but at no point was WE developing a program for the government.

[The Chair, Conservative, Rachael Thomas]

Thank you, Mr. Shugart.

We will move to Mr. Gerretsen for five minutes.

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

Thank you very much, Madam Chair.

Mr. Shugart, in your testimony at the finance committee on July 21, you indicated, “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.”

This committee heard from two academic witnesses yesterday who said that all conflicts have to be considered, regardless of the scale.

Can you elaborate on your remarks?

[Ian Shugart]

Yes. I think I indicated to the finance committee my identification of a problem. I do not have a final answer, but I did indicate that one of the main vehicles—it's clearly in the Conflict of Interest Act—for dealing with conflict of interest is disclosure of the conflict so that if there is a tension in objectives, people can see that, and people can judge for themselves whether it is likely that the decision-maker is going about the responsibility of making decisions so as to further his or her own interests.

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

Let me just build on that for a second. To continue your point, you also said in that meeting, “I must say that, of course, one of the standard means of dealing with conflict of interest...is disclosure.” You then noted that the Prime Minister's involvement with WE was well documented in the public domain, and therefore was in essence disclosed.

Can you comment on that?

[Ian Shugart]

I offer that as at least some insight into why I, for my part, did not identify any looming conflict of interest here. The Prime Minister's past involvement with the charity was well known.

I would say that what the Prime Minister himself said about recusal.... That is the second classic vehicle for dealing with conflict of interest. He has indicated that when it came to the actual decision-making moment, he looks back and regrets that he did not absent himself from that discussion.

Every conflict of interest situation is a situation unique to itself. Yes, there are classic issues to be aware of and avoided, but this was a matter of major public policy involving significant public resources. To a substantial degree, it seemed to me that this did call for the knowledge, at a minimum, of the Prime Minister and the Minister of Finance on that scale.

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

Mr. Shugart, would you say that rampant ethics problems exist within the PCO, the Prime Minister's Office and the greater public service at large?

[Ian Shugart]

I certainly would not. We are governed by the Conflict of Interest Act. I very deliberately am not going to pass judgment on questions that are before the Ethics Commissioner. That is his responsibility. But I would indicate that the Conflict of Interest Act is followed every day by public office holders with respect to declarations, the consultation with the Ethics Commissioner with regard to potential conflicts of interest, orders to divest, and screens for conflict that are set up sometimes beyond what the commissioner has called for.

The Conflict of Interest Act is very definitely a living reality for our government institutions.

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

In your opinion, does the act work? Is it fulfilling its objective?

[Ian Shugart]

The act, as every other mechanism of accountability, is the result of successive encounters with problems over decades of governments. In that sense, it is kind of a living document.

[The Chair, Conservative, Rachael Thomas]

Thank you—

[Ian Shugart]

It's ultimately for parliamentarians to say whether it is adequate to the challenges we face.

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

Thank you.

[The Chair, Conservative, Rachael Thomas]

Thank you, Mr. Shugart.

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

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

Thank you, Madam Chair.

Mr. Shugart, there is a range of topics I'd like to address with you. If I've understood correctly, you said that the Prime Minister wasn't in a conflict of interest given that his family's involvement with WE Charity was known to the public.

Is that what you said?

[Ian Shugart]

I'm not sure it was public at that point. It may have been. Having said that, I imagine his mother's involvement with WE Charity was in the public domain.