Information & Ethics Committee on Nov. 8th, 2023

[Sheryl Urie]

Our funding agreement with the federal government is, I believe, the contribution agreement you're referring to.

We work in conjunction with ISED any time our funding comes up for renewal. As Ms. Lawrence indicated in her opening statement, we've worked over the past five or ten years to continue to evolve SDTC to meet the needs of the clean-tech ecosystem.

Our focus, more recently, has been very much on the small to medium-sized enterprises, and on trying to ensure that those entrepreneurs can access the same type of funding that larger organizations do across Canadian government funding programs.

We continue to evolve our funding agreement with a focus on those types of activities, as well as on intellectual property—one of the key ingredients for a lot of our companies. It is the biggest asset most of them hold, so we're trying to include additional provisions relating to the protection of intellectual property, the importance of it, and the importance of entrepreneurs understanding the measures they need to take to ensure they have an appropriate intellectual property strategy.

Ensuring that those types of costs are eligible within our funding program is very important.

[Mona Fortier, Liberal, Ottawa—Vanier, ON]

Based on all the observations, allegations, research and information that have been brought to your attention recently, are you looking at how you'll continue to do your business? Do you see any potential changes that need to be made? Could you share that with us, to show us that you see some improvements that need to be made?

[Leah Lawrence]

I'll start and Ms. Urie can add the detail, which she's excellent at.

The contribution agreement evolves. Our job and our mandate is to meet the expectations of the ecosystem. This was in fact detailed and shown in detail in this evaluation that we got from ISED in February 2023. As I said in my opening statement, it was a draft at that point, but was about to be released.

What it says in there is that we have created activities that are important to and necessary for the ecosystem. So in the entire time that we work with ISED, we are always in constant dialogue about what that looks like, what the contribution agreement says, and how we should evolve it. We do this every time that we get new funding. In my tenure, I think there have been four or five contribution agreements—she would know better than I—and each time we try to evolve them to meet the needs of the ecosystem.

Regarding the things in the RCGT report, we disagree with some of the things they think are in contravention. Therefore, we've already raised that with Innovation, Science and Economic Development, and we're having a dialogue about how those things may need to be changed or not. At this point, really what we're talking about is codifying some things that we had had agreement on with ISED in our view. An assistant deputy minister attends every one of our board meetings. We are in continuous dialogue to make sure that we're in compliance and that we are meeting the needs of public policy that have been put forward in terms of innovation, and we expect to be able to continue to do so.

We've already had, as was mentioned by Mr. McConnachie, a first meeting on the management response and implementation plan. We're well on our way. We're looking forward to getting the funds going and flowing again back to entrepreneurs and the passion that we have for them.

[The Chair, Conservative, John Brassard]

Thank you, Ms. Lawrence.

Thank you, Ms. Fortier.

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

[René Villemure, Bloc, Trois-Rivières, QC]

Thank you very much, Mr. Chair.

Mr. McConnachie, do you think that, in a conflict of interest, recusing oneself is enough and that that is the best practice?

[Douglas McConnachie]

Mr. Chair, I'm not an expert on conflict of interest, but certainly from my experience within government, I believe that the appropriate practices are to disclose. I believe that's the legal threshold, and the best practice would be to document those conflicts. I think it would be additional to also document the manner in which the conflict has been managed.

[René Villemure, Bloc, Trois-Rivières, QC]

Thank you.

Ms. Verschuren, when a conflict of interest arises, do you think recusing yourself is a best practice?

[Annette Verschuren]

I think it is normal best practices today, but to add to Mr. McConnachie's point, I think the declaration needs to be managed and needs to be recorded.

[René Villemure, Bloc, Trois-Rivières, QC]

Ms. Lawrence, I have the same question for you.

[Leah Lawrence]

Absolutely, and that is the practice we follow, that the declaration is made, it's minuted and recusal happens. As in the report and as it was stated, our minuting can be improved in certain instances on that.

[René Villemure, Bloc, Trois-Rivières, QC]

I've always felt that even if someone recuses themself or walks out of the room, the influence stays in the room.

What do you think, Ms. Lawrence?

[Leah Lawrence]

That is the best practice. What I would say is that our boards of directors and our employees are held to high standard and know what the expectation is with the code of ethics. Therefore, we expect that those conversations do not happen and that influence [Inaudible—Editor]

[René Villemure, Bloc, Trois-Rivières, QC]

Do you think the influence stays in the room? It may not be discussed, but the influence remains in the room.

[Leah Lawrence]

What I know is that our act requires that the people who are appointed to our board must have experience in the profession and in the sector, so it's difficult to have a board of directors that is completely conflict free.

[René Villemure, Bloc, Trois-Rivières, QC]

Okay. I hate to ask questions like my friends beside me, but I'm going to ask you to tell me whether or not the influence stays in the room.

[Leah Lawrence]

Yes, I guess it can, but I think that our board of directors tries to make sure that they hold the highest standard.

[René Villemure, Bloc, Trois-Rivières, QC]

Thank you.

How would you characterize the current governance of SDTC?

[Leah Lawrence]

Governance at ISED.... I'm not sure I understand the question.

[René Villemure, Bloc, Trois-Rivières, QC]

On a scale of 1 to 10, how would you grade the governance of SDTC?

[Leah Lawrence]

Oh. It's at SDTC. I would say we used the highest best practices. We can always do better, obviously, so I would say it's in the top quartile.

[René Villemure, Bloc, Trois-Rivières, QC]

Who considers these best practices: is it you, or is it others as well?

[Leah Lawrence]

Approximately every two years, we bring in KPMG or another of the big accounting firms to advise us on what the best practices are, and we adopt those recommendations and move them forward. The ethics adviser is one of those recommendations that we've adopted from those reviews and moved forward.

[René Villemure, Bloc, Trois-Rivières, QC]

Okay.

How could we strengthen governance control at this time?

[Leah Lawrence]

I believe yesterday, there was a discussion about our act. Our act is 20 years old. I think the community at that time was much smaller than it is today. Today, I think there are expectations that are different from 20 years ago, so I would encourage the committee to look at that and to propose changes to the act as they deem fit.

[René Villemure, Bloc, Trois-Rivières, QC]

Thank you very much.

Ms. Verschuren, from your perspective, how would you characterize the governance of SDTC?