Thank you very much, Mr. Chair.
Thanks to the members of the committee for inviting us to speak on this issue.
I know that members are aware of the timeline of events as they've been stated at the ETHI committee meetings, but if you will permit me, it may be helpful for me to use my opening remarks to contextualize the discussion this evening and emphasize our commitment to getting to the facts of the matter and taking the necessary steps to restore confidence in the management of public funds at SDTC.
As you have heard, in March 2023, upon learning of the serious allegations made against Sustainable Development Technology Canada, or SDTC, the Minister of Industry requested that the Department engage the firm of Raymond Chabot Grant Thornton to conduct a fact-finding exercise. These were serious allegations that warranted proper due diligence with next steps that are informed by an assessment of all evidence.
The resulting fact-finding was based on a review of documentation related to organizational policies and procedures, program governance, the project approval process and select interviews. At its conclusion, the fact-finding exercise found no clear evidence of deliberate wrongdoing. What it did find, however, were weaknesses in governance and controls, and instances in which the organization was not in full compliance with its contribution agreement. For this reason, SDTC was issued a management action plan with an implementation deadline of December 31.
The management response and action plan is comprehensive and includes measures to ensure there is a clear and consistent process to declare and document real or perceived conflicts of interest, that the project approval process is fully compliant with the contribution agreement as well as enhanced documentation protocols and internal controls.
There is also a requirement for SDTC to strengthen reporting requirements to give Innovation, Science and Economic Development Canada, or ISED, increased oversight over ongoing compliance.
Pending satisfactory implementation of the required corrective measures, all new funding by SDTC has been temporarily suspended.
While the management response and action plan specifically address the conclusions of the fact-finding exercise, the department has also held consultations with the Office of the Auditor General. The Auditor General has decided to conduct an audit of Sustainable Development Technology Canada. We're committed to offering our full co-operation, obviously, and look forward to the AG's final report.
Mr. Chair, the Raymond Chabot Grant Thornton fact-finding exercise could not directly examine the recent allegations of labour and employment contraventions, including harassment or abuse by SDTC management against complainants, due to SDTC's status as an arm's-length, shared-governance corporation, but in the course of the work by RCGT, weaknesses were observed. Following discussion with the board, SDTC agreed to allow a third party to have a closer look at these allegations. In that regard, the minister requested that the Department of Justice appoint a law firm to undertake a fact-finding exercise into the allegations and report the findings to the minister. McCarthy Tétrault was appointed as the legal agent.
To facilitate the McCarthy Tétrault review, SDTC has agreed to allow current and former employees to speak freely to the law firm without violating any applicable settlement agreements or non-disclosure agreements. A fact-finding report will be produced and prepared in a manner that respects privacy laws.
Committee members, the government is completing its due diligence, which is an important, necessary, step. Interim control measures are in place and the ultimate outcome will be informed by the Auditor General and the McCarthy Tétrault Human Resources Review.
I am hopeful that with the actions being taken we are on the path to addressing the organizational shortfalls and restoring confidence in the management of public funds.
I would note that SDTC has played a key role in supporting the needs of Canada's clean technology companies. If you have a brief look at the statistics, you can see the results. Investments made by the organization have been in over 500 companies to date, which have generated $3.1 billion in annual revenue, created 24,500 jobs and brought 194 new technologies to market. The estimated reduction of greenhouse gas emissions of these technologies is the equivalent of about seven million cars off the road.
We feel that this organization has played an important role. It's important that we get the current reviews right so that public confidence can be restored.
With that, Mr. Chair, I am ready to answer questions.
