Evidence of meeting #49 for Finance in the 43rd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was charities.

A video is available from Parliament.

On the agenda

MPs speaking

Also speaking

Greg Thomson  Director of Research, Charity Intelligence Canada
Kate Bahen  Managing Director, Charity Intelligence Canada

11:35 a.m.

Liberal

Francesco Sorbara Liberal Vaughan—Woodbridge, ON

In your work at Charity Intelligence, where's the accountability for Charity Intelligence? I go back to the point where you were a buy-side analyst—I was a sell-side analyst, as most of us were—and I wonder about the due diligence in what Charity Intelligence does. You only have two or three people working there as your staff. There are a lot of charities in Canada and many people will go your site to get your views.

Where's the due diligence on your side on the quality of the research you're putting out? As a sell-side analyst, you put a buy, hold or sell recommendation and put a price target on it. You do it for equities, bonds, or derivatives, and so forth. However, your point of view is very tricky and requires a level of due diligence that's even higher than just reading financial statements on a quarterly basis or going to an investor presentation.

11:35 a.m.

Director of Research, Charity Intelligence Canada

Greg Thomson

We talk to charities continually and ask them for their feedback. We get their response to what we post publicly and we discuss any issues that we have with our work. We believe that we're being as accountable as we possibly can.

11:35 a.m.

Liberal

Francesco Sorbara Liberal Vaughan—Woodbridge, ON

Thank you.

Thank you, Mr. Chair.

11:35 a.m.

Liberal

The Chair Liberal Wayne Easter

Thank you.

We'll move along to Mr. Fortin and then go to Mr. Julian after that.

Mr. Fortin, the floor is yours.

As a reminder to Kate and Greg, speak fairly clearly and as closely to your mikes as you can.

Mr. Fortin.

11:35 a.m.

Bloc

Rhéal Fortin Bloc Rivière-du-Nord, QC

Thank you, Mr. Chair.

Ms. Bahen, Mr. Thomson, I am glad to see you here today.

Ms. Bahen, you just mentioned that proper due diligence should have started with a study of the 2019 financial reports, which are available on WE Charity's website.

What important information about the matter before us would we have been able to find there?

11:40 a.m.

Managing Director, Charity Intelligence Canada

Kate Bahen

Sorry. I didn't hear the interpretation.

I believe, Mr. Fortin, your question was about what information did we see in the audited financial statements.

11:40 a.m.

Bloc

Rhéal Fortin Bloc Rivière-du-Nord, QC

I know what information is available in the financial reports.

My question is about what information the due diligence could have discovered and that might have been relevant in the matter before us.

11:40 a.m.

Liberal

The Chair Liberal Wayne Easter

Kate, I'm not sure whether you're on the English stream.

If you look down at the bottom of your Zoom screen, it will say “participants”, and there's a little circle there. Make sure you're on the English stream and then the French interpretation will come through properly.

Go ahead.

11:40 a.m.

Managing Director, Charity Intelligence Canada

Kate Bahen

Greg, do you want to respond?

11:40 a.m.

Director of Research, Charity Intelligence Canada

Greg Thomson

Yes.

First, I would say that the due diligence should have started with WE Charity Foundation. The fact that the contract wasn't made with WE Charity, but with an organization with no employees and no assets, should certainly have raised a lot of questions and discussion, first of all. But looking at WE Charity specifically, the donor advisory we had with regard to the bank covenant was very clear from the audited financial statements, and anybody with financial statement knowledge would be able to go through and see what we saw when looking at their debt levels and how they were structuring themselves.

11:40 a.m.

Bloc

Rhéal Fortin Bloc Rivière-du-Nord, QC

Feel free to confirm my understanding that WE Charity had a short- or medium-term debt of about $10 million. Is that correct?

11:40 a.m.

Director of Research, Charity Intelligence Canada

Greg Thomson

I believe it was $13.7 million in debt.

11:40 a.m.

Managing Director, Charity Intelligence Canada

Kate Bahen

It was $13 million, but there was $10 million due in this current year.

11:40 a.m.

Bloc

Rhéal Fortin Bloc Rivière-du-Nord, QC

To whom was that owed? Who was the creditor for that $10 million?

11:40 a.m.

Managing Director, Charity Intelligence Canada

Kate Bahen

It would be a Canadian bank.

11:40 a.m.

Bloc

Rhéal Fortin Bloc Rivière-du-Nord, QC

That is with regard to WE Charity. The WE Charity Foundation had no staff and no debt. So this incorporation is a recent one. Is that correct?

11:40 a.m.

Director of Research, Charity Intelligence Canada

Greg Thomson

It was started at the very beginning of 2019.

11:40 a.m.

Bloc

Rhéal Fortin Bloc Rivière-du-Nord, QC

Earlier, you mentioned that the Kielburger brothers appear on the boards of directors of none of the entities that we will call "the WEs”. There are dozen or so different entities—12 to 15 of them. The Kielburger brothers do not appear on the boards of directors of any of them, but they appear as cofounders.

What conclusions can you draw from that?

11:40 a.m.

Managing Director, Charity Intelligence Canada

Kate Bahen

I think it's as Mr. Angus talked about, that when you're not registered as a lobbyist, you can fly under the radar. When you're not an officer or a director of an organization, a charity or a for-profit, there is no reporting requirement by the auditors. The auditor must report transactions from a charity or a business to its directors or to its officers, but there are no disclosure requirements if you are a co-founder. That's just a box they don't have. With the title of “co-founder”, when we look at the financial statements of the ME to WE Foundation or WE Charity, we're not seeing any of the transactions to the co-founders. That is not required to be reported.

11:40 a.m.

Bloc

Rhéal Fortin Bloc Rivière-du-Nord, QC

Okay. Let me change the subject a little.

Are you aware that WE Charity really has no contacts or network in Quebec, and they asked a lobbying or communications firm called NATIONAL, it turns out, to work in Quebec to find companies and to run programs?

Were you aware of that aspect of the WE Charity Foundation? Did you know that they had turned the management of the program over to NATIONAL?

11:45 a.m.

Managing Director, Charity Intelligence Canada

11:45 a.m.

Bloc

Rhéal Fortin Bloc Rivière-du-Nord, QC

Do you know the communications firm called NATIONAL?

11:45 a.m.

Managing Director, Charity Intelligence Canada

11:45 a.m.

Bloc

Rhéal Fortin Bloc Rivière-du-Nord, QC

Does Charity Intelligence Canada have a presence in Quebec?

11:45 a.m.

Managing Director, Charity Intelligence Canada

Kate Bahen

We work with Quebec donors. We just have one website. You can access the website from anywhere in the world.