Finance Committee on July 28th, 2020

[Peter Fragiskatos, Liberal, London North Centre, ON]

Thank you very much.

One of the most important revelations of today, at least for me, has been.... I know, Mr. Kielburger, you just spoke about it moments ago. It is a crucial revelation. This is the idea that there was no financial benefit for your organization in building and administering the program, the program being the Canada student service grant. I hear that and I take you at your word, of course.

What would you say to the average Canadian who would ask why you are involved in something like that? Why the interest in the Canada student service grant? What's in it for you? Was there a personal gain? Was there something along those lines?

Certainly I'm not making that judgment, but I think a lot of Canadians, when they hear you make the statement that there wasn't going to be a financial benefit, will say, what's in it for you guys? What's in it for WE?

[Craig Kielburger]

Sir, when you're 12 and 17 years old and start a children's charity, and continue in that role for 25 years, that's the answer to your question. This is why we do what we do. It is something we care about deeply.

We have an extraordinary team. They work very hard. It is incredibly unfortunate that in the past 25 days, we have seen the integrity of an organization, the service by thousands of teachers across this country and the work of students who have volunteered called into question for purposes that have been supporting other people's agenda, when the facts are very clear.

Why do we do what we do? It was the same reason 25 years ago as it is now. We want to help young people and we want to help children. This is our core. This is when the government asked us, in the middle of a national pandemic, if we would work our hardest, even though, yes, we had to tighten our belts by laying off staff. That was terrible. Our team had to work doubly hard to implement this. This is why we did what we did, sir.

[Peter Fragiskatos, Liberal, London North Centre, ON]

Mr. Kielburger, let me ask you on that point.... Again, to play devil's advocate, I know that Canadians will be asking this type of question. In your opening statement, you said, “WE Charity would not have received any financial gain from the CSSG program, and it's...incorrect to say otherwise.” You talk about the organization not being in a difficult financial position. But what about the observation that WE had recently laid off many employees? Would that not have pushed the organization in the direction of wanting to find a program to attach itself to in order to gain some sort of benefit?

Again, I'm not making that judgment, but Canadians will have that question. Do you have a response?

[The Chair, Liberal, Wayne Easter]

That will be your last question.

[Peter Fragiskatos, Liberal, London North Centre, ON]

At any point, did you raise the fact with government officials, any government official, that WE had laid off employees?

[Marc Kielburger]

Sir, our objective was, again, simply to help, when Rachel Wernick asked us to help. That was the objective.

Specifically, yes, we had to make some very difficult decisions. This was, again, the source of the conversation with the prior witness, Michelle Douglas. We have tremendous respect for her. We made hard decisions very early on during the pandemic, and we were able to very much financially make those decisions to ensure stability. When we were asked to help, yes, we wanted to help. The organization would not have been better off or worse off because of our desire to help. We simply wanted to help.

[Peter Fragiskatos, Liberal, London North Centre, ON]

To the last point, was the matter of WE laying off a number of employees raised with any government officials at any point?

[Marc Kielburger]

Sir, we did explain to ESDC that we had to staff up for this experience. We were very clear with them that we had to let go some of our staff during the pandemic, and we explained that we were keen to bring some of those staff members back, in a short-term role, to help us with this experience. It wasn't done formally through an email, but it was done through conversations. They asked us if we had the staffing capacity to do so, and we were very transparent, saying that, yes, under the circumstances, we could look to some of the individuals who did go through those layoffs and we could potentially bring them back, on a short-term contract, to be of assistance. A lot of those individuals kindly put up their hands, and they worked really hard. We were about to launch something very special.

[The Chair, Liberal, Wayne Easter]

Folks, we're starting to get down on time.

We'll go to Mr. Fortin for three minutes. I hope his system works. Then we'll go to Mr. Julian.

Mr. Fortin, go ahead.

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

Thank you, Mr. Chair.

My question is for both Mr. Kielburgers.

We know about your asset management experience, your development background with various organizations around the world and your ties to the Trudeau family. I want to make it clear that I am not in any way being critical of the qualities of Mrs. Trudeau, Justin Trudeau's wife or his brother. It has absolutely nothing to do with it.

Given the intimate ties that link you with these individuals, whom you hired because they are from the Trudeau family or the Morneau family; given the exchange of gifts—we are talking about tens of thousands of dollars that Mr. Morneau may or may not pay back, depending on whether or not he thinks about it when he wakes up in the morning; given the lack of assets you mentioned in the WE foundation, which was to manage the program—you have no assets to guarantee the quality of your work. Given all that, do you find it normal that you were awarded a contract to administer close to $900 million with no call for tenders or due diligence? How often has that happened to you?

[The Chair, Liberal, Wayne Easter]

Go ahead.

[Craig Kielburger]

I feel that for the past three hours and 40 minutes, we have sought to correct the facts, which have been inaccurate in the media and shared widely, so allow me to try again.

It was not a $900-million contract. It was, in fact, closer to $543 million, to be precise, or up to this, based on eligible expenses. There were 13 references to audits, so there were multiple checks and balances in this.

To answer your question, at the heart of it I think we were in a time when nothing was ordinary. People were shutting down their offices en masse. The civil service was trying to organize national programs to assist during a pandemic. Everybody was concerned for their own care. Our staff, despite that and all the hardships—having their own children under their feet, working around the clock, trying their best to launch a national service program—did this out of service and out of a desire not to be helped by government, but to help government.

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

You did it as a service, to help the government, but you were paid up to $43 million to do it. It is written in your contract. When I provide a service, I don't get $40 million or even a quarter of a million dollars. So, we will come back to the word "service" again later.

Whether it is $900 million or $500 million, the fact remains that it could go as high as $900 million. However, those numbers aside, I understand from your testimony that due diligence was not done. Ms. Wernick called you to chat. You did not speak to Mr. Trudeau.

When I put the question to Mr. Morneau, he believed that due diligence had been done, that he had not seen it but that it had been done. I understand that we are in an emergency situation; you are right to say so. We are experiencing a pandemic and responding as best we can. However, do you not find it strange that you were awarded a contract to manage, let's just say, half a billion dollars? Let us stop getting bogged down in details. Really, it is only $400 million more.

You have a contract to manage half a billion dollars for which you are paid $43 million by individuals with whom you have ties, and with no due diligence, gentlemen. I am not taking anything away from the quality of the work you have been able to do in terms of volunteerism. You may have fulfilled an extraordinary mission. You may both be the next Mother Teresa for all I know.

However, I am checking to see what our government is doing with our money. I see a situation that seems extremely strange to me. I have never seen anything like it. So I ask you, who are in this business, how often are you asked to manage half a billion dollars and are paid $43 million. How often do you do it quickly, working on the back of an envelope, and with no due diligence?

[The Chair, Liberal, Wayne Easter]

Thank you, Mr. Fortin. That is the end of your question. You are coming through loud and clear in this format.

Mr. Kielburger.

[Marc Kielburger]

Sir, I'll let Craig provide some context, but nothing at this time was ordinary. The CERB is not ordinary. Paying 75% of companies' wages, which is what the Government of Canada is doing, is not ordinary. Having the conversation about a pandemic and seeing people, months ago, literally stockpiling toilet paper was also not ordinary. Details, with respect, do matter, because it's $912 million one moment and $543 million another moment, and that's a lot of money in-between.

Once again, this was all about eligible expenditures. It was up to $543 million, and our portion was only for eligible expenditures. We were making no profit. We were asked to do this. We wanted to do this.

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

We have been asking you for some time to specify your expenses. You tell us that you cannot say.

[The Chair, Liberal, Wayne Easter]

Sorry, Mr. Fortin, but your time is up.

Madam Clerk, I'm going to have to get you to start shutting down mikes.

The gentlemen are finalizing their answer. Just end your answer there, Craig or Marc.

[Craig Kielburger]

The contract speaks to this in great detail. Of the $43 million, $8.75 million was immediately paid to other charities and it was immediately transferred. More funds were being paid to afford the tech bills to support young people so they could participate in the program. We were helping to deliver a program with call-centre support, translation, access across the country and direct mentorship for 20,000 youth, helping also with recruitment, the legal fee payments and filling out T4s. This was a massive undertaking. Again, it was only the eligible expenses. Not only would we have made no profit, but, frankly, a charity can't even make a profit.

[The Chair, Liberal, Wayne Easter]

Okay, thank you. That will end the answer.

I'll give members the lineup that will take us to the end of the meeting. We'll have Mr. Julian for three minutes, then Mr. Morantz, Mr. McLeod, Mr. Poilievre and Ms. Koutrakis.

Go ahead, Mr. Julian.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

Thank you, Mr. Chair.

I'm quite frankly not satisfied with a whole range of the answers that we've had today. Many of them haven't been answers. They've been, I think, speeches, but we're looking for answers here.

The issue of the insurance covering potential liabilities, which you've admitted are massive, is something that doesn't make sense in the context of putting a contract into what is a shell foundation. A shell foundation is a foundation with no assets. I would ask that you make all of the insurance documents available to us around the ESDC contract. I think that would be helpful for us to find answers that have not been forthcoming during this committee meeting.

I'm also concerned about board transparency. Michelle Douglas testified earlier that the board did not approve the setting up of the WE Charity Foundation.

How many of the many entities—at least a dozen in Canada and many, many more overseas—have been set up without the board actually approving the setting up of those entities?

[Craig Kielburger]

Sir, allow me to nuance, because nuance in facts matters. In the conversation that took place, the WE Charity Foundation was originally established as an idea to hold the legal liability for WE Charity.

For example, I was on the board of Scouts Canada for many years. It's a great organization. Liability became a significant issue, as I learned from my service on that board. They looked at that very issue. WE looked at that very issue. As per Ms. Douglas and other board members, we chose not to proceed, as a general statement, for WE Charity to use this vehicle. That's why it was put on a shelf. It was unused, as per the board's request.

However, when the Government of Canada asked us to assume liability during a global health pandemic for 40,000 youth and all non-profits involved, that entity was repurposed, amended in its statements and repurposed to serve this need.

[Peter Julian, NDP, New Westminster—Burnaby, BC]

I'm sorry, but you haven't answered my question, which is, why, when the board hadn't approved the setting up of the entity, you set it up just the same. You haven't answered the question of how many of these various entities have been set out without board approval or without knowledge of the board.

However, time is pressing, so I'm going to go to the U.S. regulatory procedures.

Can you confirm that the various WE foundations, boards, companies, charities are being fully disclosed and are meeting all of the requirements of U.S. regulatory filings, including the issue of disclosure of non-arm's-length relationships, either marital relationships or relationships that are business relationships?

[Marc Kielburger]

Sir, we understand that this information is coming from a group called Charity Intelligence.

I want to apply some context to answer your question. This is a group that lost its charitable status in 2012. It's a group that—

[Peter Julian, NDP, New Westminster—Burnaby, BC]

I'm not asking about them. I'm asking about you.

[Marc Kielburger]

I'm about to answer your question.