Finance Committee on July 28th, 2020

We host hundreds and hundreds of trips, sir.

2:10 p.m.

Founder, WE Charity

Yes.

We'll look into that question.

2:10 p.m.

Liberal

The Chair Liberal Wayne Easter

Thank you. That information will be provided.

We will now go to Mr. Fraser for five minutes.

For the two-and-a-half-minute rounds, we will go to Ms. Gaudreau and Mr. Julian.

Ms. May, I believe you wanted in. That will be a two-and-a-half-minute round.

Mr. Fraser.

Liberal

Sean Fraser Liberal Central Nova, NS

Thank you very much, Mr. Chair.

I'm very much enjoying the back and forth in the testimony, though I sometimes have trouble hearing the answers over the questions.

First, one of the responses you gave—initially to my colleague Ms. Dzerowicz, and then to Mr. Fragiskatos—I found stunning. I want to make sure I have my understanding correct.

Of the $500-or-so million program, there is an “up to” $43-million administration fee, depending on how many students can be placed. I was under the impression that this was going to provide some sort of benefit to the organization for administering this program.

Am I correct in my understanding that every penny of that administration fee, if the program were actually executed properly, would not have gone to the organization but would have been exclusively for expenses?

Founder, WE Charity

Sir, that's correct. It would have been exclusively for expenses, number one.

Founder, WE Charity

For program expenses—not even administration [Inaudible—Editor].

Founder, WE Charity

Yes.

Number two, it's actually not an administration fee, sir. It's actually a program fee.

We were doing this on behalf of the government, helping the government. We were asked to do this by the government. The organization itself would not profit. We were there because we wanted to be of assistance.

Again, this wasn't an administration fee. It was a program fee, and 100% had to be used, of course, for the program.

Liberal

Sean Fraser Liberal Central Nova, NS

So you're telling me, in no uncertain terms, that none of the affiliated organizations with WE Charity or the ME to WE Social Enterprise actually stood to benefit financially from executing this program.

Founder, WE Charity

Correct. In fact, let me add, sir, that the ME to WE Social Enterprise was not a party and has never received federal funding; has never at all.

To answer your question, yes, all of the non-profits, because they're only non-profits as part of this contract, all had the same key aspects on audit, on fulfillment, and yes, every penny had to be spent on the program implementation only or be returned to the government. The—

Liberal

Sean Fraser Liberal Central Nova, NS

I'm sorry to cut you off, but I do have limited time. I want to turn my attention, if I can, to....

Mr. Angus, in his questioning, seemed to be very frustrated with the notion that there would be a separate corporate entity set up to limit liability. I practised law before I got into politics. It was routine to me to see corporate entities set up new companies for the express purpose of limiting liability.

To be honest, when I first saw it in the charitable context—I have not practised much law in the area of charities—I found it a little odd, but it's starting to make a little more sense to me today. What I'm hearing is that you stood to gain absolutely nothing financially, but you were asked to take on all of the liability for placing 40,000 or more students during a global pandemic.

I trust that if you did not have the opportunity to limit your liability, you would not have taken on the task of executing this program. Is that fair?

Founder, WE Charity

Correct, and allow us to underscore that this was the request of ESDC and the terms of this contract were agreed to by ESDC.

Liberal

Sean Fraser Liberal Central Nova, NS

When ESDC made that request, are you saying they requested that you set up a corporate entity, or they requested that you take on the liability?

Founder, WE Charity

They requested that we take on the liability. We informed them that the only way we would feel comfortable fulfilling the government's request was through this structure. They analyzed it, they endorsed it and they signed a contract.

Founder, WE Charity

We shared all the information with ESDC, in terms of what these structures would do, and we specifically explained to them that this would be our ability to hold, to limit that liability as part of that process, and they were aware.

Liberal

Sean Fraser Liberal Central Nova, NS

And their recommendation to the government that WE Charity was best placed to execute on the service grant program was made after you had made clear to them that your strategy to limit liability would be to set up a separate corporate entity that did not hold assets.

Founder, WE Charity

Sir, it wasn't a separate corporate entity; it was a separate non-profit organization—

Liberal

Sean Fraser Liberal Central Nova, NS

Thank you. That's—

Founder, WE Charity

I was on the call with other individuals from the professional services side with ESDC. We made that clear, because we were very concerned about the request that we were asked to take on a liability for 40,000 young people to volunteer during a pandemic.

Liberal

Sean Fraser Liberal Central Nova, NS

Okay.

I expect I have limited time left, so I'll try to get one question in and let you answer it as you will. I asked the previous witness about proposal development and sort of unsolicited program ideas that are submitted to MPs, to governments. I take it this is what happened, at least with some different program that preceded the student service grant, but I'm curious, more broadly. Is this something that WE Charity does on occasion? Have you done it with previous governments? Have you ever had other programs funded by previous governments after that kind of a back and forth?

Founder, WE Charity

I appreciate the question. Sometimes we're responding to formal proposals, as we have with Canadian Heritage for Canada 150. Sometimes it is iterative with the government. For example, we worked closely in the previous government with Minister Flaherty and Minister Clement on various projects that we created together with them. This is an interesting fact: In previous years, under the previous Harper government, we actually had a higher percentage of our total budget given by the federal government than last year under the Trudeau government.

We have worked with a number of governments in the same manner, of all political stripes.

Liberal

Sean Fraser Liberal Central Nova, NS

When you were receiving those grants from the previous government, that would have been around the same time...it would have been contemporaneous with the hosting of WE Charity events or ME to WE events at 24 Sussex by Ms. Harper, or the attendance of WE Day or other charitable days or activities with other MPs of the governing party at that time as well. Is that fair?

Founder, WE Charity

That would be a fair assessment. We appreciate every government's support, and we will approach every government to support children and youth in this country.

Liberal

The Chair Liberal Wayne Easter

We'll have to end that round there.

I believe we're going to Ms. Gaudreau, who will be followed by Mr. Angus and then Ms. May.

Ms. Gaudreau, you have two and a half minutes.

Bloc

Marie-Hélène Gaudreau Bloc Laurentides—Labelle, QC

Thank you, Mr. Chair.

Good afternoon, gentlemen. On behalf of all our constituents, thank you for all this time, which allows us to shed some light on things.

I have two minutes and 30 seconds and am going to ask you a few simple questions in quick succession.

First, do you have a government relations expert in your organization?

Founder, WE Charity