Evidence of meeting #103 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 board.
A recording is available from Parliament.
8:10 p.m.
Liberal
8:10 p.m.
Liberal
Francesco Sorbara Liberal Vaughan—Woodbridge, ON
Thank you, Mr. Chair.
Welcome, sir, to the committee this evening.
As someone who came from the private sector before entering public service, which is obviously very important, and who worked in large organizations dealing with human resources—and the structure of an organization having the ability to deal with human resources—I think it is very important to raise concerns about a spectrum of things. It's everything from how you are being treated as an employee to the internal processes of an organization in terms of how financial matters are handled. Obviously, you raised certain concerns and so forth.
My question is, first of all, about the internal process at SDTC that you were able to follow or pursue.
Can you speak about that? How were the issues handled internally, and how did you raise them? What was the reception, and so forth?
8:15 p.m.
Liberal
8:15 p.m.
As an Individual
With regard to HR policies, it's not just that there was massive turnover at the employee level. Within a two-year period, every single HR director, which was almost four, either was fired or went on stress leave. Even when complaints were being made, every single one of the employees who were then tasked with dealing with them, if they actually took it seriously, would be pushed out or fired. Every single one of them was put under an NDA that specifically had language that prevented them from even going to the federal government to complain about the issues that were ongoing.
As it relates to the organization as a whole, the culture of fear is there, and it's existed for a long time. Even when people have the strength and courage to take those issues to someone, every single time it's been hammered down because of people like Leah Lawrence, Zoë Kolbuc and the whole organization at the top senior level management.
With regard to the funding issues, all the issues that were found by RCGT were noted by employees on multiple occasions. There are emails we can provide where we and others also had issues that were sent to executives and even to the CEO.
An example of that would be the Verschuren Centre application. That is related to the ecosystem fund. The ecosystem fund, which has been found by RCGT to not be in any way eligible, was approved by the board without any consultation with ISED. When it was approved by the board itself, the first project, second project and third project were all related to board members and had conflicts. The second one specifically was the Verschuren Centre application. Employees complained multiple times, even by email to executives, that this was an obvious conflict of interest, yet not a single one of those issues was heard by executives. We were continually ignored up until it went to the board and other board members finally admitted this was an obvious conflict of interest.
Even after it was rejected, the executives then forced employees to personally go to other federal or provincial funding organizations and use SDTC's reputation to see whether they would be willing to give the Verschuren Centre funding.
Even when something doesn't get approved, there's still employee pressure from the executive team to make sure some of these things happen.
8:15 p.m.
Liberal
Francesco Sorbara Liberal Vaughan—Woodbridge, ON
To put it on the record, when you mentioned the term “NDAs”, you were talking about non-disclosure agreements.
8:15 p.m.
Liberal
Francesco Sorbara Liberal Vaughan—Woodbridge, ON
It sounds like you and many other folks did raise issues. How long would you say it took either for the board members or for internal processes to kick in whereby these concerns were listened to or heard and it was accepted that they were serious, from your point of view?
8:15 p.m.
As an Individual
They were never taken seriously, and they were always swept under the rug.
8:15 p.m.
Liberal
Francesco Sorbara Liberal Vaughan—Woodbridge, ON
My final question is in terms of the actual functioning of SDTC.
In Canada, we have a tech ecosystem. Our levels of capital are robust, but not as robust as south of the border, with the many investors, private equity funds and so forth that exist in the United States. SDTC, in my view, fulfills a specific role and a very important one.
Would you concur that the intent of SDTC is to fulfill that role in investing, on a non-repayable grant basis, in companies in Canada that are clean tech, potentially have a very bright future, and could turn into larger entities and create a whole ecosystem themselves?
8:20 p.m.
As an Individual
I do agree with that. The issues we're talking about here aren't related to that mandate.
I agree that the grants themselves are not a problem, and the majority of companies deserve it.
One issue we're talking about here in the RCGT report was also related to the scale-up fund. On average, SDTC provides $2 million to $3 million to companies, but within the scale-up fund, it's almost $20 million per company. These are companies that are fully commercial; they have major investments in the hundreds of millions of dollars, and they're big enough that they're buying up other companies, yet, because they're connected to different executives or board members, they're getting that funding.
8:20 p.m.
Liberal
Francesco Sorbara Liberal Vaughan—Woodbridge, ON
If I could interject.... I have only about 10 or 15 seconds left.
Do you have a timeline? You were there for two years, I believe, from what it sounds like—
8:20 p.m.
Liberal
The Chair Liberal Joël Lightbound
Mr. Sorbara, I'm afraid you're out of time, so we'll leave it here.
Mr. Lemire, you have the floor.
8:20 p.m.
Bloc
Sébastien Lemire Bloc Abitibi—Témiscamingue, QC
Thank you, Mr. Chair.
First of all, sir, I would like to know the reasons why you have come to testify today.
8:20 p.m.
Bloc
Sébastien Lemire Bloc Abitibi—Témiscamingue, QC
Therefore, I would ask you to tell us why you are a credible witness. Why should we believe your testimony?
8:20 p.m.
As an Individual
It's because I'm not a disgruntled employee. I left SDTC of my own accord, and I'm one of the rare few employees who wasn't fired or given an NDA.
I can also provide evidence and documentation showing that even when I provided my resignation, I was offered a promotion and more money to stay at SDTC, because throughout the two years I was there, I was a high performer. I received all of that in writing, and I can also provide it.
I also worked on every single one of these funds: the seed fund, the ecosystem fund, the skill fund and the regular tech fund.
Being on the financial side, I got to see every single aspect of these projects and more importantly of the financial compliance. We knew exactly what the rules were because we were dealing with the rules there, and we could see where the deviations were, whether they were slight or major.
That's why I believe I'm a credible witness. I'm not a disgruntled employee, as SDTC continues to state about other people. I'm not under an NDA, so I have chosen to come here by my own choice, taking all those risks.
8:20 p.m.
Bloc
Sébastien Lemire Bloc Abitibi—Témiscamingue, QC
In your opening remarks and in the answers to the questions that were asked, you often used the term “we”. Who is “we”?
8:20 p.m.
As an Individual
That includes current and former employees. This would be between 20 and 30, half on the inside and half on the outside. Again, the majority of ex-employees were not fired for cause. Every single one of them was given a package with the stipulation that for them to receive the package, they would have to sign an NDA.
On the inside, you can clearly see that a major culture of fear still persists. Although the CEO is gone, all of the friends she's hired in the executive seats, like Zoë Kolbuc or Steven Engel, and all of the other passive bystanders who continue to perpetuate these issues still exist. It's very hard to get a lot of people willing to come to these situations.
8:20 p.m.
Bloc
Sébastien Lemire Bloc Abitibi—Témiscamingue, QC
According to a November 1 Radio-Canada article, a whistle-blower felt that the government had made a series of false promises to you and had instead sought to minimize the consequences of your complaint. The word “your” is used in the collective sense, I understand.
Can you explain what are the broken promises referred to in the article?
8:20 p.m.
As an Individual
I think the most major one has to be the protection of employees. The minister stated that as soon as this report was completed, they started this HR investigation. That's a lie.
Since day one, we made sure the HR issues were noted, because those are the most important aspect of the investigation. How can you properly investigate, when employees aren't being protected on the inside? They've known about the culture issues from day one, and those were proven to them even in May.
The most egregious thing that happened during ISED's investigation had to be that in September, while they were still investigating, another employee was fired by Leah Lawrence, and then nothing was done to protect this employee. That was during the ISED investigation. ISED was unwilling to stand up and stop that.
This employee was put under the same sort of NDA that every other employee has had to deal with, so ISED knew about this, but they were unwilling to do anything to protect employees, just as they're doing now.
Even the McCarthy Tétrault investigation that they've started has already broken confidentiality, because the name of every single person who signs up for it is shown to SDTC executives, and they can list everyone who's taking this.
The whole HR investigation has been a farce. On the other side, what we asked was not for everyone to be fired. We asked for proper investigation, and when all of this was found in May, it was then suddenly changed. The continued moving of the goalposts happened throughout this investigation, and the key issue is that because no one was protected, this has continued to lapse.
8:25 p.m.
Bloc
Sébastien Lemire Bloc Abitibi—Témiscamingue, QC
How do you assess the effectiveness of the whistle-blower protection mechanisms that have been put in place? Are any adjustments needed to improve them?
Also, with respect to the lack of trust, what specific measures do you hope to see in order to fix the trust relationship between you and the government?
December 11th, 2023 / 8:25 p.m.
As an Individual
Well, with regard to our experience in the whole situation, I think it's frankly embarrassing. The whole whistle-blowing process basically proves to us that there's a two-tier system that exists. If you are a normal, regular Canadian citizen and you go to your government to complain that, hey, there is wrongdoing happening, and you risk your career and your professional reputation, they don't even do anything about it.
This whole fallacy that we were disgruntled and there was some sort of coercion with all of this happening...none of that's actually true, because we were patient. How does a fact-finding take seven months? That's factually incorrect, and they know it, because that turned into an investigation by June, and they continued to do it. What I find disgusting about this is that they continue to deny even the most basic level of truth.
When you talk about whistle-blowing, they never protected anyone, so for everyone who went to ISED as it relates to this, the thing they were definitive about was that you are not going to be protected from the federal government if anything happens from the backlash that would come from the SDTC executives or board members toward these employees.