Finance Committee on Aug. 12th, 2020

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

Okay. So you heard about it in the news. Was it in July or August? Can you specify when you heard?

[Carla Qualtrough, Liberal, Delta, BC]

Probably in July, yes. I, for example, knew the contribution agreement was signed, I think, on June 23. I did not know at that time the actual legal entity that we were entering into agreement with, but I wouldn't. It wasn't my file, and it was after that. It was subsequent to that.

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

However, as Minister of Employment, Workforce Development and Disability Inclusion, you were an interested party all the same.

Am I mistaken, Madam Minister?

[Carla Qualtrough, Liberal, Delta, BC]

It wasn't a contribution agreement that I would have eyes on in my ministerial capacity, because it wasn't my file. Minister Chagger, as of March 6, I believe, by order in council, was an ESDC minister. She signed the contribution agreement. She had the legal authority to do it. It wasn't my agreement to sign.

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

Okay, but once you learned that it was the WE foundation, did you ask Minister Chagger or anyone else in the cabinet about it?

[Carla Qualtrough, Liberal, Delta, BC]

I think I had conversations with my staff about it, but as I said yesterday regarding my attribution of WE Charity and the WE Charity Foundation, I personally saw no distinction. I attributed the track record and history of the WE Charity to this other legal entity and was still of the opinion that they could have delivered this program.

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

I understand, but it is not the same entity. It is a separate shell company, a different company. You mentioned the financial track record, but the WE foundation had none.

For instance, did you check whether the founders of the WE foundation personally guaranteed the foundation's obligations or whether some other guarantee existed to ensure that the funds granted to the foundation were well protected? Did you check into that?

[Carla Qualtrough, Liberal, Delta, BC]

I was not involved in the file to that level of detail. I wasn't a party to any of the discussions around who would be the entity signing. That was completely within the lane of Minister Chagger.

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

If I understood your answers from yesterday correctly, you also did not read a due diligence report on WE Charity or the WE foundation.

To your knowledge, did anyone else in the cabinet check into the guarantees provided by the WE foundation?

[Carla Qualtrough, Liberal, Delta, BC]

Let me clarify. When I received the briefing at the cabinet committee, I was briefed on the recommendation, and there were no flags with respect to the public service's recommendation. Certainly, every other minister at that table had the same or a similar briefing and the same information in front of them. I wouldn't want to suggest at any point that we collectively didn't do our own homework preparing for these meetings. We knew what we were approving, and we completely deferred to the recommendation of the public service.

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

How can you say that you knew what you were doing if you were not even aware that your contact, the one signing the contract, was not WE Charity, contrary to what you were told?

You were misled in cabinet. It was not WE Charity. It was the WE foundation. They are two completely separate organizations, with separate assets, liabilities and officers. So you were misled.

How can you tell us that you knew what you were doing and that you approved it all? After all, you never approved the WE foundation.

[Carla Qualtrough, Liberal, Delta, BC]

Again, I wasn't privy to that level of detail. I was confident in—

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

It is not a detail.

[Carla Qualtrough, Liberal, Delta, BC]

Well, it's how I experienced it. I was briefed on the recommendation of WE Charity, and I supported that recommendation based on the background work that the public service had done.

[The Chair, Liberal, Wayne Easter]

This will be the last question, Mr. Fortin.

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

Thank you, Mr. Chair.

Madam Minister, I understand and respect your testimony, but it is not a detail.

You were told that you were going to send $43.5 million to a company to administer a $900-million program and you were told not to worry, because that company was WE Charity, when in fact it was another company. I don't consider that a detail.

Were you not shocked when you learned that you had been misled? No further due diligence requests were made?

[Carla Qualtrough, Liberal, Delta, BC]

As I said, I spoke with my own team about this. I also deferred to the Minister of Finance, the officials at finance, the rigour of Treasury Board oversight on this and the due diligence that the public service did. This was very well prepared and thought through. I have every confidence that people did their homework and that all of these teams had eyes on this level of detail. I did not.

[The Chair, Liberal, Wayne Easter]

Thank you both.

Mr. Clerk, I don't know if I'm the only one, but the only way I can hear the minister is when I toggle English to “Off”. When I'm hearing French, I have to toggle back and forth between “Off” and the English interpretation. I hope nobody else has that problem, but it's something we should look into for the next panel.

With that, Mr. Julian is first, followed by Mr. Poilievre.

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

Thanks very much, Mr. Chair.

Thank you, Minister Qualtrough, for your presence here today. You made important comments yesterday. You stated that the government had dropped the ball and that there was no excuse or justification for the decision. I think those are appropriate comments.

Given the Prime Minister's comments about the due diligence that was supposed to take place, when did you become aware of the clear appearance of a conflict of interest with the Prime Minister's family and with the Minister of Finance, his family and his travel history?

[Carla Qualtrough, Liberal, Delta, BC]

I'm not being difficult, but as I mentioned, I knew the Prime Minister and his wife had spoken at WE events. I didn't know any further detail about that until after the announcement on June 25.

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

Thank you for that. So you were unaware.

The issues that have come up as a result of this decision are myriad. The clear concerns that have been raised are the probable violation of minimum wage laws, the probable violation of labour standards and the probable violation of teachers' codes of ethics across the country. All of these have been raised as massive concerns around this scandal.

Minister, first, when did you become aware of the fact that minimum wage laws, labour standards and teachers' codes of ethics had not been examined? Second, if this had gone through your ministry, what would you have done to vet this program to ensure that these violations didn't take place?

[Carla Qualtrough, Liberal, Delta, BC]

Those are really important questions.

First, let me contextualize this. Again, yesterday I failed to make the connection sufficiently between the student benefit and the CSSG. We knew students could get $5,000 to $8,000 of student support in addition to the $5,000 they could get. We really saw this as a suite of measures. In fact, some of the criticism around the amount of the initial student benefit was about why it wasn't as generous as the CERB. Our response, and my response, was that students have access to other financial measures, such as the CSSG.

In terms of your specifics around labour laws, Benoît may be a better person to ask about that from a due diligence point of view. I'm not sure I should speculate on how I would have personally handled this file. Certainly we all have our own approaches to things, so I prefer not to comment on how a colleague managed a file or how I would have, without all the information. I just don't have enough information to speculate fairly.

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

Okay, but what you're saying is that you were unaware of these things until they came out in the media.

[Carla Qualtrough, Liberal, Delta, BC]

Yes.

Well, what I will say is that I was satisfied that we were addressing any perception that people weren't being paid enough by the student benefit piece coupled with the CSSG. However, I was also very comfortable with providing volunteer opportunities, and I know others aren't.

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

I think you can understand that when people hear your responses and the responses of other ministers, it is not clear that people knew what they were approving when cabinet actually approved this.

Now, were you aware, prior to the decision, of the financial problems that WE Charity was having, and the fact that their board...? Certainly, we've heard testimony from the chair of the board of directors. The board has effectively been fired. Were any of those facts brought to mind before the decision?