Thank you, Mr. Chair.
Thank you to members of the committee for inviting me in to be the first one to address this.
As you know, earlier this year, my department was made aware of allegations concerning Sustainable Development Technologies Canada, commonly known as SDTC. Let me be clear: I expect all organizations to which we provide public funding to act with diligence, care and integrity in all aspects of their work.
In the spirit of this, I asked my department to immediately conduct a fact-finding exercise with an impartial third party, Raymond Chabot Grant Thornton. The fact-finding report found no clear evidence of wilful misconduct, but did identify a number of instances in which STDC was not in full compliance with its contribution agreement. There were a number of “inconsistencies and opportunities for improvement”.
Let's be clear. Our government will always hold all organizations that receive public funds to the highest standards.
That is why we demanded that SDTC take additional corrective measures in response to the investigation report that was published. Those measures include an action plan, which was sent to management, for addressing the problems identified in the report. I expect that the action plan will be implemented no later than December 31 of this year. In addition, as a precautionary measure, we have temporarily suspended the funding of all new projects until those corrective measures are in place.
There have also been allegations regarding human resources management practices. Given SDTC's independent status, Raymond Chabot Grant Thornton was unable to examine the issue directly in the course of its analysis.
In the course of its work, however, RCGT—Raymond Chabot Grant Thornton—did observe what appeared to be inconsistencies and areas for improvement in human resources practices at STDC. Of note are allegations that have recently come to my attention that there might be additional former employees who may wish to provide evidence of inappropriate behaviour but feel that they cannot do so without exposing themselves to liability. We will not allow these concerns to go unanswered.
My department cannot unilaterally take on this task. The Canada Foundation for Sustainable Development Technology Act establishes STDC as an arm's-length organization. The responsibility for human resources falls with the independent board of directors.
That is why my department has requested that SDTC take the necessary steps to conduct an in‑depth review of the allegations regarding its management of human resources. That review will be directed by an independent law firm, which will subsequently inform me of its findings.
SDTC has agreed to allow current and former employees to freely speak to this third party independent law firm without violating any applicable settlement agreements or non-disclosure agreements.
The allegations of mismanagement of public funds are serious. It is important that we take prompt action in accordance with the principles of due diligence and procedural fairness. We must base our actions on facts.
It is integral that due process and due diligence continue to guide these next steps. I also remain fully committed to exploring these allegations.
In addition to ISED's efforts, Mr. Chair, we have been working closely with the Office of the Auditor General on this matter for a number of weeks. I welcome the Auditor General of Canada's decision to conduct an audit, and my department will co-operate fully with her work.
In conclusion, Mr. Chair, I am confident that we have taken all appropriate actions with the implementation of corrective measures, the pending independent review of SDTC human resources management, and the Auditor General of Canada audit. Let me be clear: I am prepared to take any further action as required under the circumstances.
With that, Mr. Chair, I'm happy to answer questions from my esteemed colleagues.
