Information & Ethics Committee on Nov. 8th, 2023

[The Clerk]

It was distributed to all members.

[The Chair, Conservative, John Brassard]

Yes, it was distributed to all members.

Mr. Brock, go ahead. You have five minutes.

[Larry Brock, Conservative, Brantford—Brant, ON]

Actually, it's Mr. Gourde.

[The Chair, Conservative, John Brassard]

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

[Jacques Gourde, Conservative, Lévis—Lotbinière, QC]

Thank you, Mr. Chair.

Thank you to the witnesses.

My question is about a fund administered by SDTC. The seed fund provides a grant and has no reporting requirements for payment. Is that correct?

[Leah Lawrence]

I'm sorry. The translation.... Is the question about no requirements for reporting?

[Jacques Gourde, Conservative, Lévis—Lotbinière, QC]

The seed fund provides a grant and has no reporting requirements for payment. Is that true or false?

[Leah Lawrence]

No, it's not true.

Ms. Urie can provide further information for you.

[Sheryl Urie]

Our seed-funding stream is similar to the other streams of funding we provide. They are subject to the same terms and conditions, as required in our contribution agreement. The seed-funding stream is required to report at the end of their project on the project results, as well as on the eligible costs incurred and the funding received to complete the project.

[Jacques Gourde, Conservative, Lévis—Lotbinière, QC]

The fund provides a one-time payment of between $50,000 and $100,000, paid in full to a company at the seed stage when the contract is signed. From 2019 to 2022, 180 projects were funded by this fund, for a total of $17,551,275, so an average of about $97,509. Almost everyone who applied received the maximum funding, $100,000. Is that true or false?

[Sheryl Urie]

No.

Not all who applied received the maximum of $100,000. There are varying amounts. Generally, most projects that come in will be eligible for $100,000. That's the maximum contribution available in the seed-funding stream.

[Jacques Gourde, Conservative, Lévis—Lotbinière, QC]

We know that 180 projects have been funded, but can you tell us how many projects were turned down?

If you don't have that information today, could you send a written response to the committee indicating the number of projects that have applied for the seed fund? Could we get a list of the 180 companies that received money?

[Sheryl Urie]

Our funding is currently publicly available on our website, but we can also table a list with the committee of all projects that received funding under the seed-funding stream.

[Leah Lawrence]

I could add, for the honourable member, that the seed funding is actually by nomination by over 80 accelerators across the country. What we do is work to have a network throughout the region so that we can be aided by people locally to put it forward.

[Jacques Gourde, Conservative, Lévis—Lotbinière, QC]

Thank you. Have—

[Leah Lawrence]

In fact, there are more people nominated—

[Jacques Gourde, Conservative, Lévis—Lotbinière, QC]

I'm sorry to interrupt you, but I have other questions to ask.

Have the projects that have been approved been reviewed by the board of directors? Did a team recommend to the board of directors that it approve the projects or was it done through an internal process? This is not a fund that is excessively large. Have all the projects been approved by the board of directors?

[Sheryl Urie]

All funded projects are recommended by the project review committee and then subject to approval by the board before any funding is available. That's for all of our projects. They're reviewed internally by SDTC for eligibility and whether they meet the terms and conditions of our contribution agreement for funding. They're also subject to an external third party review. We have engaged partners who have expertise perhaps in technology, finance, business and those—

[Jacques Gourde, Conservative, Lévis—Lotbinière, QC]

I'm sorry to interrupt you, but you're not answering my question. My question is whether all the projects have been approved by the board of directors.

[Sheryl Urie]

All seed-funding projects require board approval, yes.

[Jacques Gourde, Conservative, Lévis—Lotbinière, QC]

Thank you.

Were all the necessary precautions taken to ensure that there was no nepotism? In other words, did you make sure that the people who applied for seed funding weren't from the same family as the members of the board of directors? Were all due diligence procedures followed to ensure that there were no conflicts of interest?

[Sheryl Urie]

For our seed-funding program, all projects are subject to the same conflict of interest policy as the rest of the start-up and scale-up funding that we provide. The names of the projects, as well as the accelerator partners that they're working with, are provided to all board members in advance of a project review committee meeting. Board members are required to make the same conflict of interest declarations, consult the registry of conflicts, and those conflicts are discussed at the meeting.

[Jacques Gourde, Conservative, Lévis—Lotbinière, QC]

To your recollection, have members of the board of directors ever had to recuse themselves or step out of the room during the review of certain projects submitted to the seed fund because of possible links between them and their family members?

[Sheryl Urie]

For our seed-funding stream, the process for approval is that there are a number of projects that are approved together in a grouping. It's included in our consent agenda. The consent agenda is how the approval is evidenced. Individual members with those conflicts are identified in the minutes, but they are not removed from the consent agenda approval.

[Jacques Gourde, Conservative, Lévis—Lotbinière, QC]

I look forward to your providing us with the list of projects.

Thank you.