Finance Committee on July 22nd, 2020

[The Chair, Liberal, Wayne Easter]

Yes, but allow her to answer the questions.

Ms. Kovacevic, go ahead.

[Michelle Kovacevic]

Thank you.

I can tell you that leading up to the Prime Minister's announcement on the 22nd there were three briefings with Minister Morneau, on the 14th, the 18th and the 21st. At no point in any of these briefings did we talk about the idea, nor was advice given, to select WE as a recipient for a third party. That never came up.

[Pierre Poilievre, Conservative, Carleton, ON]

That wasn't my question. My question was, when did you discuss—

[The Chair, Liberal, Wayne Easter]

This is your last question, Pierre.

[Pierre Poilievre, Conservative, Carleton, ON]

All right.

The question was, again, on what occasions did you discuss WE with Bill Morneau? That's all. It's just that specific question.

[Michelle Kovacevic]

It's only when I have a scheduled briefing with the minister. I gave you the three scheduled briefings.

In the first one, on the 14th, we were talking about the broad $9-billion package and absolutely not about WE. On the 18th and the 21st, there was a range. We talked about a grant, a credit, Shopify, Ceridian.... In a verbal briefing I certainly may have mentioned it. In our actual analysis, we did not talk about it, except for what the minister did actually say, which is that we attached the annex of the first proposal we received from WE to a briefing note, without any recommendation and without any analysis.

[The Chair, Liberal, Wayne Easter]

Thank you, both.

We'll turn, I believe, to Ms. Dzerowicz next and then to Mr. Fortin.

Mr. Fortin, you had your hand up earlier. What were you going to say?

You're not coming through to me somehow.

[Rhéal Fortin, Bloc, Rivière-du-Nord, QC]

Everything is fine now, Mr. Chair.

This is too much technology for me.

Mr. Chair, as I was saying, the meeting of the Standing Committee on Access to Information, Privacy and Ethics starts at 4 p.m. and we had planned to finish ours at 3 p.m. However, it is taking longer and we are now 40 minutes behind schedule.

Are we scheduled to stop this meeting at 4 p.m., given the meeting of the next committee? What is the plan?

[The Chair, Liberal, Wayne Easter]

We will go a little bit beyond four o'clock, because we're going to go with eight questioners at four minutes each, if we can.

We'll go to Ms. Dzerowicz. We'll definitely get to you next, and you'll have time to get to the other committee.

[Rhéal Fortin, Bloc, Rivière-du-Nord, QC]

Thank you, Mr. Chair.

[The Chair, Liberal, Wayne Easter]

Ms. Dzerowicz.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you so much, Mr. Chair.

Thank you, Ms. Kovacevic, for your testimony today. Thanks for your extraordinary work.

There is a narrative—and I think you're hearing some of the questions—that it's believed that Finance or someone at Finance suggested only WE and that it was the intention of our government to suggest only WE as the deliverer for the Canada student service grant. Can you please, for the record, let us know whether it was you or whether it was the officials at Finance who suggested only WE as the recommendation for the CSSG, or was WE always considered with a whole number of other organizations initially?

Could you just clarify that, because that is kind of the implication of a lot of the questions here?

[Michelle Kovacevic]

I can clearly say that up to the April 22 announcement of the Prime Minister, where we announced a set-aside of up to $900 million for a Canada student service grant, there was no recommendation about WE and no recommendation to enter into a third party. In fact, the recommendation or the follow-up was that the Department of Employment and Social Development would have to bring in a proposal with the advice on how to do this and with whom.

With regard to the final decision, of course, when the government announced that it would be entering into a contribution agreement with WE, we, the Department of Finance, recommended this advice to our minister. In our note, we do note that the WE Charity organization, we've been told, is in fact the only organization that could stand up the proposal as described, with the sort of magnitude, ambition and volume of the service placements desired. Most importantly, it would be in the time required.

You'll recall that on April 22, when the Prime Minister made the announcement—a very high-level announcement with work still to be done by the department, ESDC, to figure out how to implement this and with whom—university and college students were just about to finish their spring semesters, so there was real pressure to do things quickly and to get this off the ground.

[Julie Dzerowicz, Liberal, Davenport, ON]

Thank you.

What type of due diligence is done on organizations in a normal process? Would it have been the responsibility of Finance to have done the due diligence on third party organizations before contracts were signed, or would that have been the responsibility of whoever was responsible for the program?

[Michelle Kovacevic]

There are many kinds of due diligence, and it's not for me to speculate on how well due diligence was executed. What I can say is that the lead on the negotiation of the contribution agreement is not the Department of Finance. It is, in fact, the Department of Employment and Social Development, so choosing the organization and the accountability is up to ESDC.

The Department of Finance, of course, approved the $900-million set-aside, so we are looking at the fiscal framework and making sure that whatever ESDC recommends and puts forward actually abides by and is in keeping with the broad parameters of what we put in the funding decision to spend up to $900 million.

[The Chair, Liberal, Wayne Easter]

We're going to have to end it there, because Mr. Fortin doesn't have a lot of time.

Mr. Fortin, the floor is yours for four minutes.

[Rhéal Fortin, Bloc, Rivière-du-Nord, QC]

Thank you, Mr. Chair.

Ms. Kovacevic, you talked about a meeting that took place on the evening of April 18, during which WE was proposed. However, you don't remember whether you or someone else proposed it. You said that you were not sure, but that you remember that everyone agreed. Is that correct?

[Michelle Kovacevic]

Yes, you understand correctly.

[Rhéal Fortin, Bloc, Rivière-du-Nord, QC]

Okay.

Could you tell me who was present at that meeting?

[Michelle Kovacevic]

To the best of my recollection, there was me, of course; my associate deputy minister, Suzy McDonald; and Rachel Wernick, who is the senior assistant deputy minister at ESDC. She may have been joined by somebody, but I would have to check the record. I'm not entirely sure who.

[Rhéal Fortin, Bloc, Rivière-du-Nord, QC]

Once you have checked, could you send us a copy of the document with the list of names, whether it's the minutes or another document? Is that possible for you?

[Michelle Kovacevic]

It would be my pleasure.

Indeed, the committee has ordered us to produce all kinds of documentation, which we are gathering and will be submitting by the August 8 deadline.

[Rhéal Fortin, Bloc, Rivière-du-Nord, QC]

If I understand correctly, there were five of you at that meeting: Rachel Wernick, yourself, a person named Suzy, whose last name I forget, and two other people. Is that correct? Were there four or five people there?

[Michelle Kovacevic]

No, sorry. I said that I can recollect for sure.... This was a teleconference at 10:00 at night, I think, or late in the evening. It was me, Suzy, and Rachel for sure. Beyond that, my recollection is a just a little—

[Rhéal Fortin, Bloc, Rivière-du-Nord, QC]

I would like to know how many people were with you.