Evidence of meeting #101 for Industry, Science and Technology in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was artificial.
A recording is available from Parliament.
6:50 p.m.
Chief Executive Officer, CERO Technologies
Again, sir, I can't speak to those facts. I'll have to take your word for it.
6:50 p.m.
Conservative
Rick Perkins Conservative South Shore—St. Margarets, NS
You were totally unaware of anyone else's conflicts of interest when they were voting for money for their own companies.
6:50 p.m.
Chief Executive Officer, CERO Technologies
On the second board vote, we were advised by lawyers that we did not have to redeclare. Considering I was not at the first board vote, I would not have had knowledge of that.
6:50 p.m.
Conservative
Rick Perkins Conservative South Shore—St. Margarets, NS
Do you not think, under the ICD rules of real and perceived conflicts of interest that you were in a conflict of interest when you joined the board, because you had an investment in companies that already had a relationship with SDTC?
6:50 p.m.
Chief Executive Officer, CERO Technologies
When I joined the board, sir, I was asked to resign from the board of one company that had received funding, and I promptly did that.
On February 5, when I joined the board, I declared five conflicts, three of which I had investments in. Yes, sir.
6:50 p.m.
Liberal
The Chair Liberal Joël Lightbound
Thank you very much, Mr. Perkins. That's all the time you had.
I now turn the floor over to Mr. Turnbull for six minutes.
6:50 p.m.
Liberal
Ryan Turnbull Liberal Whitby, ON
Thanks to all of the witnesses for being here today.
Mr. Ouimet, I'm going to ask you a quick question.
We've heard from other witnesses who were former board members at SDTC that recusals on the board for real or perceived conflicts of interest were a fairly regular practice, but what I want to know is whether they were documented, because I think there's some discrepancy as to whether they were adequately documented.
From your perspective, were recusals regularly documented?
6:50 p.m.
Engineer, Sustainable Development Technology Canada
The conflict of interest management procedures are rigorously followed. It's important to note that the act introduced in 2001 to constitute SDTC requires that directors come from the green technology industry and that they be connected. The legislator has thus put in place a recipe for creating conflicts of interest. Accordingly, we have had thoroughly rigorous practices in place to manage them from the start.
Every time a file is submitted to the governance committee, we provide those who receive it with a list of businesses, stakeholders, shareholders and and officials involved and we ask them whether they have any conflicts of interest. As a result, a person can immediately see whether he or she has a real, perceived or potential conflict and, if so, immediately recuses. From that point, the individual receives no documentation and does not participate in decision-making.
The list of individuals in conflict of interest is noted at the start of every meeting of a decision-making, investment or advisory committee. From what I understand of the subsequent reports, in certain cases, there is no indication that a particular person left the meeting at a particular moment or subsequently returned. However, since the practice was known to everyone, that person declared a conflict of interest at the start of the meeting, recused himself or herself during consideration of the file in question and subsequently returned to the meeting. I have been attending board meetings in my capacity as director since 2018; I attended those meetings in another capacity starting in 2006, and I regularly witnessed recusals by all the directors of several generations.
6:50 p.m.
Liberal
Ryan Turnbull Liberal Whitby, ON
Thank you for that. It sounds like recusals were regular practice, but perhaps, at times, were not documented as well as they should have been. I think we've heard that.
Would you agree that perhaps they weren't documented as regularly as they should have been?
6:50 p.m.
Engineer, Sustainable Development Technology Canada
The administrative recommendations noted in the recent reports convey that perspective. It's probably factual.
6:50 p.m.
Liberal
Ryan Turnbull Liberal Whitby, ON
Thank you.
Mr. Lafond, in your case, you mentioned a specific instance with the MakerLodge, I think, in the SIIT leadership, and the decision that you recused yourself from, which is great to hear.
Was that documented? Do you know if that was documented?
6:55 p.m.
Liberal
December 5th, 2023 / 6:55 p.m.
Strategic Development Advisor, As an Individual
Yes, I can.
6:55 p.m.
Liberal
Ryan Turnbull Liberal Whitby, ON
Thank you very much. That would be great.
Mr. Kukucha, I'm going to you now. You said you were the recipient of the whistle-blower call, which is important for us to dig into. You said they did not submit any evidence, even though it sounded like you had requested evidence. You also said in your opening testimony that you felt the board fulfilled its fiduciary responsibilities with regard to those complaints that came in. Can you describe, in a little more detail, what process you followed, to give us that assurance? I want to know how you can make the claim that the board filled its fiduciary responsibility.
6:55 p.m.
Chief Executive Officer, CERO Technologies
Absolutely. Thank you.
I have my notes for the timeline. I received a call on January 27 and immediately consulted with some board members on the governance committee. We formed a special committee on February 1. We referred that and hired counsel on the 3rd, and we started on that as early as February 10. Our goal was to make this a priority and to address this immediately because there were serious allegations that were outlined by the whistle-blower.
After that, there was a rigorous investigation by the special investigatory counsel we hired to look into this. They put in 23 hours' worth of interviews. Over one to three sessions, for the number of people they talked to, they reviewed over 13,000 documents and worked with the special committee to answer the questions that were raised to me. It appears, now, that we didn't have all the facts because of the dossier. It was raised with me that the mandate be provided to the counsel.
6:55 p.m.
Liberal
Ryan Turnbull Liberal Whitby, ON
Thank you.
With regard to the COVID support decision-making that the board had done, you mentioned that was the second decision, and that was just before you joined the board, where you declared your conflicts of interest just prior to that decision.
I understand from reading documents and hearing other testimony, that the decision was made based on a whole portfolio of companies, where no company was actually disclosed in the motion that the board voted on. Is that true?
6:55 p.m.
Liberal
Ryan Turnbull Liberal Whitby, ON
Okay. Is that why the legal advice you received said that there was no perceived conflict of interest? I think this is a very important point, because we've heard from numerous witnesses that there was no perceived conflict of interest because, in fact, you were approving a whole portfolio with a flat amount or a percentage, I think. I'm not sure which, but maybe you can just clarify that.
6:55 p.m.
Chief Executive Officer, CERO Technologies
My recollection is that it was a pool of capital that management had the discretion to make more investments in, up to a certain percentage, but I honestly don't know the specifics, sir. It's been a while.
From a legal perspective, that was my understanding, certainly, that those conflicts had been declared, and we did not have to re-declare again.
6:55 p.m.
Liberal
Ryan Turnbull Liberal Whitby, ON
Just very quickly, would you be able to table the document that you had offered? You offered two documents in your opening testimony that you could table with this committee. Would you be able to table those? One was that no companies were disclosed. I think the document that actually demonstrates that would be helpful.
Then you mentioned another one. I had it in my notes. Could you also table the other document you mentioned?
6:55 p.m.
Chief Executive Officer, CERO Technologies
Certainly, sir. I'll ask SDTC to table the director's motion. We received a partial transcript from the phone call that the whistle-blower taped, so I'd happily be open if the whistle-blower wanted to disclose the whole tape. I'm very comfortable with my conduct.
I offered to save space for that individual to testify, and I let him know that we were going to take these allegations very seriously and going to action them immediately.
6:55 p.m.
Bloc
Sébastien Lemire Bloc Abitibi—Témiscamingue, QC
Thank you, Mr. Chair.
I'll go to you first, Mr. Ouimet.
For a corporate director such as yourself, one's reputation is probably, even obviously, what's most important. In that connection, earlier you mentioned that it was normal for there to be conflicts of interest, given the way SDTC was constituted.
You have to understand the level of expertise that was required around the table. That was particularly the case when SDTC was founded, and the same is true today, 20 years later. The context required the involvement of persons who had a very clear understanding of what it meant to create a new business in emerging economies and in the green economy. It required a high level of expertise.
Could anything have been done differently than to engage individuals with confirmed experience and detailed knowledge of the sector? Could that program have been established differently?
7 p.m.
Engineer, Sustainable Development Technology Canada
Originally, in 2001, SDTC's mandate concerned much more limited fields, such as water, air, soil, processes and decontamination projects. So its mandate was very narrow but complex.
Its mandate has now become more complex because clean technologies have expanded into virtually all sectors of the economy. You need only consider the investments being made around the world, particularly in the United States, to see that.
Thorough knowledge of many sectors is therefore required. SDTC has 15 directors. The organization thus has to attract directors who have vertical sectoral skills in all fields. SDTC also requires a matrix of technological skills and knowledge of the various stages in the development of a business. Three factors must be considered: the sector, the kind of technology and the stage of the business's development.
Some of the new businesses that SDTC finances are at the bench-scale stage, others are starting up, and still others are growing. They also have completely different management and technological development dynamics depending on their stage of development. SDTC therefore requires a board that is capable of assessing the situations of those businesses because it has to consider a large volume and broad diversity of investments.