Information & Ethics Committee on Dec. 11th, 2020

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

I'm sorry. I don't have too much time.

On that point, regardless of who represented the company, if a Canadian operation of a $46-billion public company reached out to say that they had a pro bono solution in the midst of a crisis, would you have taken that meeting?

[Simon Kennedy]

I took many meetings, as did my staff, with companies like that. As I say, it was a matter of routine.

The largest companies in the world in manufacturing, software and logistics came to see us, offered their help and wanted to know what they could do. That was routine. I can't account for them all on this call, but absolutely, I was in many, many meetings where I'd listen to companies say they'd really like to help out and ask if there was anything they could do. That was routine, and in fact a routine part of what we do as ISED is interact with businesses.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

My first thought when constituents reached out with potential solutions was not who an individual had done dealings with previously; my first thought was if this individual could help and to explore the actual proposal they had on the table.

Did the Ethics Commissioner make any finding that you violated any rule?

[Simon Kennedy]

Mr. Chair, no, they did not. I was subject to the requirement not to deal with Mr. MacNaughton, but other than that, there were no other requirements I'm aware of, and certainly no commentary beyond that.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

Have you ever been subject to a finding by the Ethics Commissioner that you personally violated a conflict of interest rule?

[Simon Kennedy]

No, Mr. Chair, I have not.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

Thanks, Mr. Kennedy.

[The Chair, Conservative, David Sweet]

Thank you very much.

We'll now move on to the second round with the Bloc Québécois as well as the New Democratic Party. This is a very fast round, colleagues. I always warn you about it; it's two and a half minutes.

Madame Gaudreau, you have the floor.

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

Thank you.

I'll continue along the same lines.

Mr. Kennedy, we just said you didn't break the rules. Why were you ordered not to contact Mr. MacNaughton?

[Simon Kennedy]

I think that question should go to Mr. Dion, the Conflict of Interest and Ethics Commissioner.

From what I understand—

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

I'm asking for your opinion, Mr. Kennedy. These reasons have certainly been explained to you.

[Simon Kennedy]

I suspect it was because I attended a meeting where he was present. I was in the same room, a virtual room, with Mr. MacNaughton only once. Other than that, there's no reason for this order, because that's the only interaction I've had with him.

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

You're telling me that you know and follow the rules.

In fact, the government has already been reprimanded twice, and public opinion and trust aren't what they were. Do you agree with me that we need to be doubly vigilant to avoid, or rather demonstrate, how well we're doing?

[Simon Kennedy]

I'm aware of the dangers. I behave in a way that clearly demonstrates that I work in an ethical manner and in accordance with the rules. This is normal. Even if there is no crisis, for all senior officials like me, this is the way we do business.

Obviously, I don't want to create problems, and I know I'm being paid by the taxpayers. So it's important to play by the rules.

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

In the context of the pandemic, beyond the issue of the two reprimands against the government, has there been increased vigilance with respect to the special procedures for Canada's plan to mobilize, which was discussed earlier?

[Simon Kennedy]

We have some requirements. First, the rules must be followed. This is always important, because breaking the rules can put all other cases at risk. So following the rules is paramount.

At the same time, we had to act very quickly. So, we had to respect all the rules while proceeding quickly. Speed was also important because Canadians were at risk.

[The Chair, Conservative, David Sweet]

Thank you very much, Mr. Kennedy.

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

Thank you, Mr. Kennedy.

[Simon Kennedy]

Thank you.

[The Chair, Conservative, David Sweet]

I know you have experience at committees. Time is always our enemy.

We'll now go to Mr. Bachrach for two and a half minutes.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Thank you, Mr. Chair.

Thank you, Mr. Kennedy. My apologies for leaving my mute off for a moment.

Mr. Kennedy, you mentioned in your earlier testimony that one of the important roles you play when you're taking these proposals from these businesses is to review the companies' financials.

Can you explain why that step is important before moving on to any sort of formal engagement with these companies?

[Simon Kennedy]

Well, I'll use the example of the strategic innovation fund, but it would apply to other programming.

If we're going to partner and perhaps make an investment in a company, then we want to have a sense of the risk that's being presented for the taxpayer. The risk can come in a number of different ways. There can be financial risk, managerial risk and technology risk. It isn't just financial.

One of the things that we would examine in the strategic innovation fund, for example, would be whether the company has the financial wherewithal to do it. Are they going to be able to raise the funding? Maybe the taxpayer money is going to go in, but they're going to raise money from other sources. Are they able to do it? Do they have enough cash in the bank so that they're not going to run out of money halfway through the project?

There are those sorts of things. There's a financial due diligence that's done, but it isn't the only kind of risk that's looked at. Can the company can partner well with others? Can they handle technology transfer if they need to do technology transfer? Also, is the technology a very high risk? Maybe it's a good idea, but the likelihood of it going belly up is high.

We would examine many of those facets in the SIF program, as an example, but financial assessment certainly would be one of them, yes.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Given that process and the importance of that process, does it surprise you that this sort of due diligence was not exercised in the $543-million contract with the WE Charity?

[Simon Kennedy]

Mr. Chair, I would clarify that other than preparing some briefing notes for ministers, which we typically would do with virtually every cabinet submission, we've had really no engagement with WE Charity or an involvement in that particular proposal. I'm not really able to comment on it.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Mr. Chair, I think I just have few more seconds left.

I'm a little surprised by this offer of pro bono services from Palantir. I'm wondering if that was something that surprised you as well in that meeting, Mr. Kennedy.