Information & Ethics Committee on Aug. 11th, 2020

[Ian Shugart]

With WE Charity.

[Matthew Green, NDP, Hamilton Centre, ON]

With WE Charity Foundation?

[Ian Shugart]

As I understand, they made the suggestion.

[Matthew Green, NDP, Hamilton Centre, ON]

Specifically, through you, Madam Chair, was it WE Charity Foundation, for the record?

[Ian Shugart]

No. I'm going to say that WE Charity, as far as I'm aware, made the suggestion that the WE Charity Foundation would be the better vehicle.

[Matthew Green, NDP, Hamilton Centre, ON]

Madam Chair, through you, in the due diligence process, who would the due diligence be applied to, the WE Charity Foundation or WE Charity proper?

[Ian Shugart]

The same issues.... I don't know at what point the focus shifted from the WE Charity to the WE Charity Foundation. I do not know if it would be the same individuals responding on the other side to both parts of the organization. I can tell you that the officials were focused with their interlocutors at WE on the due diligence, the ability of the organization to deliver the program.

[Matthew Green, NDP, Hamilton Centre, ON]

Madam Chair, through you to Mr. Shugart, I apologize. I can't accept that in a $43-million administrative exchange to administer a $912-million program that the governance of the WE Charity Foundation wouldn't have been a part of the due diligence process, so I'll put the question clearly. Was the governance of the WE Charity Foundation's stability part of the due diligence process, knowing that they were going to, as a shell company, hold the liability?

[Ian Shugart]

Chair, I understand completely the question and its legitimacy. I have every confidence that going forward we will learn from this situation whether those questions should have been examined. I'm not in a position to give the detail on the negotiation of the contribution agreement between ESDC officials and the WE organization broadly.

[Matthew Green, NDP, Hamilton Centre, ON]

Through you, Madam Chair, that's not what I'm asking. I'm asking whether in your report back on the due diligence the governance structure of the WE charitable foundation was part of the due diligence?

I'll explain why. It has been reported by Charity Intelligence that in the due diligence the process was whether the charity was able to provide full and frank disclosure to the founder about the radical change in its governance. For instance, none of this would have come to light until the June 28 tweet of the former chair Michelle Douglas, which showed that the board of directors had gone from seven to five. That's a radical departure.

I've been a part, Madam Chair, of many processes. I've been a member of the Hamilton Community Foundation. I've been on the endowment fund for the City of Hamilton, the enrichment fund. I can assure you that if there were a radical departure by the board of an organization that I was about to present money to, without any real explanation, that would raise a flag. Yet in your testimony, through you, Madam Chair, Mr. Shugart, you suggested there were no flags raised. How is that?

[Ian Shugart]

I've been very clear, a few times now, in answering your question to say that those issues with respect to the WE Charity Foundation were not raised in the subsequent briefing. To my knowledge, they were not flagged as material in the examination of WE's ability to deliver the program.

[Matthew Green, NDP, Hamilton Centre, ON]

Is that still your opinion, with all the information that's been disclosed since then?

[Ian Shugart]

In retrospect, I think if we had known what we know now, we probably would have inquired further, but I must also say that even looking back now, I have no evidence that the WE organization, had the program gone ahead, would not today be able to deliver the program as set out in the contribution agreement.

[Matthew Green, NDP, Hamilton Centre, ON]

This will be my last question. With regard to the April update that you referred to following the previous speaker's question, was the Prime Minister briefed at the time that he was involved, back in April? We know that Ministers Chagger, Ng and Morneau were already heavily involved with WE. Did the Prime Minister know at that time during your briefing that WE was on the docket for this particular program?

[Ian Shugart]

My understanding is that he did not.

[Matthew Green, NDP, Hamilton Centre, ON]

I don't see how that's possible.

[The Chair, Conservative, Rachael Thomas]

Thank you.

Mr. Poilievre, you have the floor for five minutes.

[Pierre Poilievre, Conservative, Carleton, ON]

So the Prime Minister had no idea how the program would be delivered when he announced the program on April 22.

[Ian Shugart]

The details of the design of the program had yet to be worked out. The policy was what the Prime Minister announced. The details were to be fleshed out later.

[Pierre Poilievre, Conservative, Carleton, ON]

“Later” came on May 8. At that meeting, was the Prime Minister's family's relationship with WE ever raised by anyone?

[Ian Shugart]

It was not, that I recall. The Prime Minister's own history with WE was—

[Pierre Poilievre, Conservative, Carleton, ON]

No, I know that.

[Ian Shugart]

—but beyond that, sir, no.

[Pierre Poilievre, Conservative, Carleton, ON]

Was it raised at all?

[Ian Shugart]

I do not believe it was.