Information & Ethics Committee on Dec. 11th, 2020

[The Chair, Conservative, David Sweet]

I call the meeting to order. Good afternoon, colleagues.

Now that I've had a couple of months of experience, I think that if you begin your sound check with “She sells seashells down by the seashore”, you'll probably get the best result, because apparently the “s” sound is the most difficult.

Merry Christmas. Bonne année. We're all hoping for a better 2021.

I apologize. I ran into some colleagues, and apparently I'm the grinch who stole Christmas, because all the other committees have adjourned for today.

Let's have an efficient meeting and one where we will be collegial in the Christmas spirit.

We have a little business to clear up at the end of the meeting. I don't know if we'll need to go in camera, but we will if we need to. For now we're going to continue on with our two panels.

Our first witness is Simon Kennedy. He's the deputy minister for Innovation, Science and Economic Development Canada.

Mr. Kennedy, I think you've already been informed that you have have up to seven minutes for your opening remarks. I think you know the drill. Then we will have questions and answers.

Please commence.

[Simon Kennedy, Deputy Minister, Innovation, Science and Economic Development Canada, Department of Industry]

Thank you very much, Mr. Chair. I'll just pull up my opening remarks. I'll be very brief here.

Thank you very much for the opportunity to appear before you today. It is my pleasure to appear before this committee as it studies issues of conflicts of interest and the Lobbying Act in relation to pandemic spending.

Just as all departments have been called on to protect Canadians and our economy during this extraordinary time, Innovation, Science and Economic Development Canada, ISED, has been hard at work, doing its part to help deliver a strong, immediate and effective response.

The integrity and commitment displayed within ISED as we develop and implement pandemic programming has been exemplary.

For example, the government's call to action to Canadian industry attracted more than 6,600 companies, all offering their expertise and capacity to help combat COVID-19. I believe the ministry that I'm in charge of moved swiftly to work with these companies. In fact, in a very short period we went from sourcing barely any of our personal protective equipment domestically, for example, to sourcing approximately 40% of the total value of COVID-19-related PPE contracts in Canada.

This is a significant pivot by Canadian industry, and we were very proud to help facilitate that by shifting the focus, for example, of our business innovation programming to concentrate directly on COVID-19. I'm talking here about programs such as the strategic innovation fund, the innovation superclusters, Innovative Solutions Canada and the National Research Council's industrial research assistance program. With all hands on deck, we aimed to expedite the evaluation and approval of projects so that they could get off the ground quickly to address the most urgent issues.

Without a doubt, the groundwork that we laid in previously establishing collaborative innovation programs really set us up to respond quickly and successfully. Of course, the best way to end this pandemic is with a safe and effective vaccine and related medical countermeasures, and so, Mr. Chair, we solicited the participation of industry and identified medical experts to lead independent task forces for vaccines and therapeutics respectively. In doing so, we gained insight into very technical subject matter and received invaluable advice as the government moved to fund related projects in a timely manner.

I'd like to commend my own staff for their action in securing access to needed supplies and working with colleagues in other ministries to secure access to vaccine candidates for Canadians.

Mr. Chair, in all of these instances, Innovation, Science and Economic Development Canada and its officials acted with transparency, extending assistance and offering solutions to the greatest challenge any of us have faced in our lifetime.

I can say with confidence that it has been—

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

Mr. Chair, I must raise a point of order.

There is no more interpretation.

[The Chair, Conservative, David Sweet]

Sometimes that happens, Madam Gaudreau. We'll make sure that the channels are corrected.

[Simon Kennedy]

I'm coming to the end of my opening remarks, Mr. Chair.

It's a pleasure to be with all of you. I will conclude my remarks there, and I will be very happy to answer your questions.

Thank you.

[The Chair, Conservative, David Sweet]

Thank you, Mr. Kennedy. We're working on translation now. We'll go to our first questioner as we're working on it.

Mr. Warkentin, you have the floor for six minutes.

[Chris Warkentin, Conservative, Grande Prairie—Mackenzie, AB]

Thank you, Mr. Chair.

Mr. Kennedy, have you met with Mr. MacNaughton?

[Simon Kennedy]

I attended a meeting at which Mr. MacNaughton was present, but I did not actually speak with or correspond with Mr. MacNaughton. I was at a meeting that he was at, yes. I was invited there by colleagues for a demonstration of software.

[Chris Warkentin, Conservative, Grande Prairie—Mackenzie, AB]

You were there to witness the meeting. What was the date of that meeting? Was it April 3?

[Simon Kennedy]

I'm just looking at my notes. I attended a meeting on April 3 for 45 minutes. It was a Zoom call, one of these video conferences, with a number of other people. It was hosted by Palantir. Mr. MacNaughton and a number of his colleagues were in attendance.

[Chris Warkentin, Conservative, Grande Prairie—Mackenzie, AB]

At the height of the concern about the pandemic spreading into Canada, your department was dropping everything to meet with Palantir.

What was the nature of that meeting?

[Simon Kennedy]

Perhaps I could provide a bit of context, as it might be helpful.

[Chris Warkentin, Conservative, Grande Prairie—Mackenzie, AB]

I only have six minutes, so I'd like to know exactly what the—

[Simon Kennedy]

I'll be brief, but it's directly relevant to your question.

One of the things we did in responding to the pandemic was to have a call to action for Canadian industries and companies that wished to help out. In that call, almost 200 digital service firms and software firms, large and small companies, large multinationals, and SMEs, stepped forward and made offers to provide assistance pro bono. Palantir was one of these large companies that stepped forward.

We actually met with more than 60. In fact, there were so many offers that I actually designated a couple of staff to just follow up with each of the groups that came to us. For example, when I was initially contacted by Palantir, I passed it off to this group that I had created. We were actually meeting with many firms, and not just software companies, but manufacturing operations and other organizations, and even distilleries that wanted to make hand sanitizers.

The attitude was “leave no stone unturned”. If companies were coming and saying they thought they could offer something, we certainly were willing to hear them out. That's what we did with Palantir. I and my staff attended a meeting with some of the staff from Palantir to assess their offer.

[Chris Warkentin, Conservative, Grande Prairie—Mackenzie, AB]

This is what concerns a lot of Canadians: that while there were hundreds of companies prepared to step up and help, it seemed that Mr. MacNaughton got special access. He was able to leapfrog from simply being a person who inquired, as hundreds if not thousands of companies did, to a point where he was meeting with you and other senior executives within your department.

Was Mr. MacNaughton at that meeting, and did you know he would be at that meeting when it was first initiated?

[Simon Kennedy]

I certainly checked my records. I knew I would be getting questions about this. He was on the invitation list, among a number of other people who would be at the meeting. Yes, it's fair to say that I would have known he would be there.

If I could just indicate—

[Chris Warkentin, Conservative, Grande Prairie—Mackenzie, AB]

Were you or members of your department aware that he was, at that point, the former ambassador?

[Simon Kennedy]

I was aware that he was a former ambassador, absolutely. How could I not be?

[Chris Warkentin, Conservative, Grande Prairie—Mackenzie, AB]

That is, I guess, the concern. Not only did you know that he was a former ambassador but that he would be required by the ethics code to refrain from lobbying. You were aware of that, as everybody within government would be aware.

Why was he invited to lobby when everybody around the table knew he was violating the provisions of the code and the act?

[Simon Kennedy]

I have to go back to what I said earlier. We had many thousands of firms contacting us. It was our practice, when firms contacted us offering help, to take that at face value and have an initial meeting.

We had an initial meeting with Palantir—

[Chris Warkentin, Conservative, Grande Prairie—Mackenzie, AB]

Even if it was prepared to break the rules, you were prepared at that point to break the rules.

[Simon Kennedy]

Mr. Chair, those questions are best directed to Mr. MacNaughton and his colleagues. I was not invited by Mr. MacNaughton. I attended a meeting that was suggested by Palantir. At the conclusion of the meeting, we actually told Palantir that we did not think that its software had use for us. I directed Palantir to private sector players in the industry, because its proposal actually seemed too sophisticated for the kinds of needs we had.

We took a courtesy meeting, as we did with dozens of other companies in the specific software and digital services space. We told them at the end of the meeting, “Thank you very much”, but that we did not really see any utility for their particular offer and we directed them on their way, as we have done with many other companies with which we met.

[Chris Warkentin, Conservative, Grande Prairie—Mackenzie, AB]

Did anybody at the meeting, at either the staff level or the members who were at the meeting, ever elevate concerns about the conflict of interest concern with regard to speaking directly to Mr. MacNaughton, knowing his former position?

[Simon Kennedy]

I was at a meeting to see a demonstration of this company's software. We did not have a discussion about doing business with the company. It was to understand more about their capabilities—

[Chris Warkentin, Conservative, Grande Prairie—Mackenzie, AB]

There were thousands of companies that were ready to step up. How is it that he got onto the short list?