Finance Committee on July 22nd, 2020

[Michael Cooper, Conservative, St. Albert—Edmonton, AB]

The motion reads as follows:

That whereas the Minister of Finance has accepted $41,000.00 in illegal travel expenses, and that the Minister of Finance is in flagrant breach of multiple sections of the Conflict of Interest Act, including but not limited to sections 6, 11 and 21, in addition to prior violations, that the Standing Committee on Finance hereby call on the minister to immediately resign.

[The Chair, Liberal, Wayne Easter]

So you're giving the 48-hour notice.

[Michael Cooper, Conservative, St. Albert—Edmonton, AB]

Yes.

[The Chair, Liberal, Wayne Easter]

Thank you for that. That notice is given.

Mr. Morneau, thank you for appearing before the committee today and giving your statement, and for answering our questions and taking the extra time that normally happens when we have a minister before the committee. Thank you very much.

You're released, Minister.

[Bill Morneau, Liberal, Toronto Centre, ON]

Thank you.

[The Chair, Liberal, Wayne Easter]

We'll go to the finance official, Ms. Kovacevic, for 30 minutes, if we could.

Ms. Kovacevic, hopefully your technology is working now. Do you have an opening statement, or are you just going to questions?

[Michelle Kovacevic, Assistant Deputy Minister, Federal-Provincial Relations and Social Policy Branch, Department of Finance]

Thank you, Mr. Chair.

I do have an opening statement, if you would permit me to read it.

[The Chair, Liberal, Wayne Easter]

Okay, fire away.

[Michelle Kovacevic]

Good afternoon, committee members. My name is Michelle Kovacevic and I am the assistant deputy minister for the federal-provincial relations and social policy branch at Finance Canada.

Before I start, I was made aware just as I was coming into the office that there may be an interest on behalf of the committee for me to stay longer than 30 minutes. If that is still the interest of the committee, I'm happy to do so.

I would like to provide you with context on my role in the lead-up to the announcement by the Prime Minister on the Canada student service grant, and the context with respect to the ultimate selection of WE Charity as a third party administrator.

On April 6, during the Prime Minister's morning press conference, he noted that more support for students would be coming soon. That same day, my team reached out to colleagues at Employment and Social Development Canada, ESDC, to hear about options for supporting students. My team and I also met with my minister's office to understand what was needed. Our timelines for developing the package were very condensed. Our work was informed by proposals and expertise in ESDC, as well as other departments. The package announced on April 22 by the Prime Minister included over $9 billion in support for students, including the creation of the Canada student service grant, which, at $900 million, represents 10% of the overall student package that we developed.

Today, I will focus solely on the options that were explored to develop the Canada student service grant. The key objective for us was to mobilize students to help respond to the pandemic, while also providing tuition support for their future studies. A number of options were pursued, including, first, a tuition credit or tuition waiver for students. My team, along with ESDC, explored delivering this through the Canada student loans program, directly via provinces and territories, or by post-secondary education institutions billing the federal government directly. There were issues with respect to validating the identity and eligibility of recipients, in addition to the actual capacity to deliver the program across the country. None of these were considered to be ideal.

We further looked at scaling up existing volunteer programs through the Canada service corps and TakingITGlobal, its administrator. This option was indeed supported, and funding was provided to expand the number of micro-grants for youth from 1,800 to 15,000 and to provide stipends to participants. However, there was interest in, and need for, a much broader reach beyond 15,000 service opportunities.

With Health Canada, my team examined whether students could fill a critical need in contact tracing related to COVID-19, including both volunteer options and direct federal hiring to support provincial and territorial efforts. Our teams also looked at using a temp agency to do hiring on our behalf. None of these options were selected, because a large number of volunteers had already been identified to do the work by the health portfolio, and provinces and territories, at that point in the pandemic, were still quite uncertain about how much help for contact tracing they actually needed.

My team then looked at creating a Canada experience grant that would make bursaries available to students who volunteered in positions deemed essential during COVID-19—a good deed bonus, if you will. However, given significant concerns for the health and safety of students, my team moved away from the idea of an essential position and broadened the scope of volunteering.

My team, along with ESDC of course, also considered whether two organizations working together could administer this grant. We considered a series of third parties that could have the capacity to deliver this type of program, including Shopify, Ceridian, Imagine Canada, Volunteer Canada, the Canadian Red Cross, the United Way, and the I Want to Help platform concept developed by ESDC.

The student announcement on April 22 was high-level, with further details to be worked out following further analysis by ESDC. It was during the course of this analysis that the potential of partnering with WE Charity came up.

On April 9, I received a “What We Heard” document summarizing stakeholder feedback on students at work during the COVID emergency, prepared by my minister's office. WE Charity was one of 12 stakeholders included in the document. I believe my minister actually mentioned that as well.

On April 16, in an email discussion on which organizations might be able to deliver a range of volunteer opportunities across the country, WE Charity was raised as a possibility by colleagues at ESDC. I encouraged ESDC to include WE Charity in their analysis of potential delivery options.

On April 18, I briefed my minister's office on progress on the file. I noted to them that ESDC had informed us that WE Charity may be an option. My team also held a joint teleconference with ESDC, where a number of organizations were discussed. I cannot recall who actually raised the idea to speak with WE, but I can recall that we all agreed to it.

On April 19, we received a copy from ESDC of the April 9 WE social entrepreneurship proposal that had been previously circulated to ministers. This was the first time the proposal was provided to me, according to my records. That same evening, my branch routed a briefing package to our minister that included the WE proposal as an annex, but no analysis nor recommendation was provided on WE.

The next day, April 20, my minister's office connected with WE Charity to discuss their ability to deliver volunteer opportunities. The records of this call from my minister's office note that WE Charity will rework their 10-week summer program proposal to fully meet the policy objective of national service, and increase their current placements of 8,000 to double.

On April 22, of course, the Prime Minister made his student package announcement.

On April 23, in a meeting between my team and ESDC, we discussed the possibility of WE Charity as a third party that could offer virtual volunteer placements and potentially administer the Canada student service grant. My office also set up a meeting with WE Charity to take place the next afternoon. On April 24, ESDC and finance officials spoke with WE Charity to better understand the organization and its capacity. No commitments were made, other than that ESDC would follow up.

As is usual after a funding decision and announcement, further development of the detailed program proposal was turned over to ESDC. On May 7, I received a copy from ESDC of a May 4 proposal from WE Charity to deliver the Canada student service grant for the government. This is the first time finance officials saw a proposal where WE Charity could be the third party administrator for the program.

My team continued to work with ESDC as they developed the program and advanced a cabinet proposal. I also continued to brief my minister's office, which is normal practice as major initiatives proceed to cabinet and then to launch. In this context, WE Charity was raised a number of times and ultimately formed the basis of the recommendation of ESDC to Minister Chagger that the government enter into a contribution agreement with WE Charity to administer the Canada student service grant. Finance officials supported this recommendation in related advice to our minister, including the detailed costing of the proposal, as outlined by Minister Chagger in her testimony last week.

I would be happy to answer any questions from the committee.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Ms. Kovacevic. I failed to introduce you in terms of your responsibilities. You are assistant deputy minister, federal-provincial relations and social policy branch. Thank you for that statement.

I'm not sure, and the clerk will have to tell us on this, but Ms. Kovacevic has offered to stay longer if necessary. What I would suggest is that we go to eight questioners, at four minutes per question round, and I'll go with the list I have from panel one, because I don't have a new list. That would be starting with Mr. Cooper, and then Ms. Koutrakis, Mr. Fortin and Mr. Angus. Would we be okay with that?

Madam Clerk, I have to ask you this. I know that we're under tight time frames on these video conferences. Are we going to be okay with the use of the room where this is centred in Ottawa? Are we okay to go for another half an hour? The assistant deputy minister made a seven-minute statement. Are we okay for about another half an hour?

[The Clerk of the Committee, Ms. Evelyn Lukyniuk]

I'll inquire right now and let you know if it's an issue.

[The Chair, Liberal, Wayne Easter]

Okay.

The total list I have—it's subject to change because I don't have a list, folks—would be Cooper, Koutrakis, Fortin, Angus, Poilievre, Dzerowicz, Morantz and Fragiskatos. For any difference on that, just yell at me, I guess. That's what you'll have to do.

Mr. Cooper, go ahead.

[Michael Cooper, Conservative, St. Albert—Edmonton, AB]

I think it's supposed to be Mr. Poilievre first, then me.

[The Chair, Liberal, Wayne Easter]

Okay.

Mr. Poilievre, do you want to go first? Then we'll put Mr. Cooper in your place.

Mr. Poilievre.

[Pierre Poilievre, Conservative, Carleton, ON]

Ms. Kovacevic, you attended a meeting in mid-April with Ms. Wernick. Ms. Wernick suggested before this committee that you were the one who first suggested that WE be the delivery group for this program. Is that true?

[Michelle Kovacevic]

Thank you for the question.

The meeting that you're referring to, I believe, took place on April 18 in the evening. At this point we are discussing a broad range of issues, including—

[Pierre Poilievre, Conservative, Carleton, ON]

Sorry, we don't have a lot of time. I'm just asking if you were the one who first suggested WE. That's all.

[Michelle Kovacevic]

Yes, I was certainly the one who initiated the meeting. We were talking about grant and credit, and whether there were opportunities for—

[Pierre Poilievre, Conservative, Carleton, ON]

Did you suggest WE?

[Michelle Kovacevic]

I do not recall if it was I who actually raised the idea, but what I do recall clearly is that we all agreed to it.

[Pierre Poilievre, Conservative, Carleton, ON]

Okay.

[Michelle Kovacevic]

Just to be clear to the committee, it was in the context of volunteer placements and mobilizing through their social media to get students in that.

[Pierre Poilievre, Conservative, Carleton, ON]

Prior to that, had you discussed the idea of employing WE for this with any exempt staff of the government, or of any of the ministers?

[Michelle Kovacevic]

No. According to my records, the first mention of WE, to me, was on April 16. That, again, is in a conversation I was having with my colleagues at ESDC. Again, this is in the context of —

[Pierre Poilievre, Conservative, Carleton, ON]

What were their names?