Industry Committee on Dec. 14th, 2023

[The Chair, Liberal, Joël Lightbound]

I call this meeting to order.

Good morning, everyone.

Welcome to meeting number 105 of the House of Commons Standing Committee on Industry and Technology.

Today's meeting is taking place in a hybrid format, pursuant to the Standing Orders.

Pursuant to the motion adopted on November 7, the committee is resuming its study of the recent investigations and reports on Sustainable Development Technology Canada.

I'd like to welcome back our witness, Annette Verschuren, who is joining us by videoconference.

As you know, colleagues, our last meeting was abruptly interrupted due to technical difficulties. I know that for a lot of members on this committee, it was on your Christmas wish list to meet again before the end of the year, so this is nothing short of a Christmas miracle. We are back for another meeting. I'm happy to see you all.

With that, Madame Verschuren, we thank you for being here.

Members, we'll start where we left off at the last meeting. Mr. Sorbara was asking questions of the witness. He had about three minutes left. Without further ado, I'll let Mr. Sorbara resume his questions.

The floor is yours.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Thank you, Chair.

Good morning, everyone.

Going right into it, Ms. Verschuren, can you please explain to the committee what happened at the last meeting with the issues on the technology front?

[Annette Verschuren, O.C., As an Individual]

Yes. Absolutely.

I apologize—I really do—to the chair and to all the committee members.

My computer froze. I was working with Francis, who is a tech with this standing committee, to try to get back on. It was 25 minutes, and I couldn't get my computer.... I tried with my iPad, and I think I got on a minute after the chair closed the committee.

I really apologize for this. I'm sorry.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Thank you for that explanation, Ms. Verschuren.

Going back to the issue at hand in terms of your tenure as president of the board at SDTC and how recusals were approached in the governance structure at the board, can you elaborate on the recusals and how board members would approach you or others to recuse themselves from any decisions in which a perceived conflict of interest could be apparent or occur?

[Annette Verschuren]

Yes. Of course.

What would happen was that memos would go out, declaring the projects that were going to be reviewed at the upcoming project review committee. The board members would then indicate whether there was a conflict and write in response to that memo if they were in conflict. The material would not be sent to them—those who were in conflict or perceived conflict—and they would be excluded from discussions at these meetings.

In the case of the board meetings, the members who declared those conflicts would leave the meeting at the time the projects were reviewed and recommendations were made, and would come back into the board meeting when they were complete.

In all the cases when I declared a perceived conflict, I removed myself from the board meeting and came back in after the decision had been made and recommendations had been made to the board. This would happen with all board members.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

The documentation relating to these recusals.... We've learned, through the third party investigation, that when there was a recusal, the documentation that was kept....

Was there documentation kept that said that this board member recused themselves from these matters—that would be my understanding—within the minutes of a board meeting?

[Annette Verschuren]

The material would never go to the board member who declared that conflict in the first place, so they wouldn't have that. That was a process that was very strongly adopted by SDTC.

In the case when I declared a perceived conflict, I wouldn't have received that information. That would not have been included in my board package. I wouldn't see what was said about what the recommendations were.

When the recommendations were made on behalf of the board to proceed with those projects, the board members.... In my case, I would leave the room and wait until I was called back, but the recommendation would have been made. I wouldn't know the result of that recommendation until SDTC, the following day, announced those funding projects.

[The Chair, Liberal, Joël Lightbound]

Thank you very much.

Mr. Lemire, you have the floor.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Thank you, Mr. Chair.

Ms. Verschuren, thank you for being with us today.

You told the Standing Committee on Access to Information, Privacy and Ethics:

The allegations made by this small group of former employees are false, and we are here today to set the record straight.

Do you have any other facts to correct, or do you feel that everything has already been said at the meetings of the Standing Committee on Access to Information, Privacy and Ethics and the Standing Committee on Industry and Technology?

[Annette Verschuren]

I'll just clarify the question.

Is the question you're looking to ask me about whether there's anything more to say about the accusations against SDTC?

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Yes, and I'd like to know if you want to add anything or respond to comments that have been made or questions that have been asked.

[Annette Verschuren]

I have a very professional relationship with the CEO. When these accusations were made in February and one of the board members was called, we very quickly realized that we needed to set up a three-person committee that did not include me. It did not include the CEO. The board took three months to review and analyze the accusations that were given to our board member. As a result of that, we found no wrongdoing and no misconduct. We received that report in about April or May. I think it was at that time.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

From what I understand of Sustainable Development Technology Canada, or SDTC, and what's happened in the last few months, it seems pretty clear to me that human resource practices have been a problem there.

Perhaps it was the internal organizational culture or very rigid atmosphere that led some people to mobilize to shed light on the events and speak out against something.

The second problem may lie in the note-taking by the board of directors for the reports that have been produced, among other things.

As I understand it—correct me if I'm wrong—one of the governance issues identified for all the projects and companies that received funding from SDTC is that the projects had been approved several months or years before the fabled additional funding for COVID-19 benefits came into effect.

As a result, all board members who were in a conflict of interest withdrew. The projects have not been analyzed.

Several months later, once all the necessary checks were done and everyone who had declared a conflict of interest withdrew, the COVID-19 pandemic hit, creating an emergency context.

So they wanted to add tens, if not hundreds of millions of dollars to save the intellectual property of these companies. At that point, you took the advice of a law firm and decided to treat all the projects as a block.

Since conflicts of interest had been declared and no new analysis was conducted, with the additional funding being provided in the exceptional circumstances of the COVID-19 pandemic, you decided that it wasn't necessary to analyze the projects one by one and they were ultimately approved as a block. All the members were there.

Is that what happened?

In your opinion, does that constitute a conflict of interest?

[Annette Verschuren]

Look, it was March 20. It was the third week of COVID. Our young companies were in trouble. They really were. A lot of them were pre-revenue. The board met, and management recommended that an envelope of funding be proposed to help out these companies. All the declarations of conflict had been made already for these companies. We got an opinion—

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

You're talking about new companies that received new funding in the form of COVID-19 benefits. These are all companies that had been previously studied and analyzed for a particular project for which additional funding was granted, not new funding.

[Annette Verschuren]

That's correct, because the need was extraordinary. The borders were closed, etc. Most of these companies were pre-revenue. They really needed to continue to operate, otherwise we would have lost that amazing innovation towards commercialization opportunities that we're seeing.

We as a board and management recommended to move forward with this envelope, and I'm really glad we did. The timing was extraordinarily important. We saved many companies, quite frankly, in terms of having that additional stimulus to stay alive during that COVID period.

The CEOs of these companies were extraordinarily concerned, and we reacted. All these companies had been approved. In the case of the company that I was involved with, it was approved in 2017, so all these companies had been approved.

The advice from the legal firm was, “Look, this is a package, this is an operational issue, and this is an approach that we should take. We recommend that this become an envelope to be approved all together.”

That's what happened.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Thank you.

My time is up.

[The Chair, Liberal, Joël Lightbound]

Thank you very much.

Thank you very much.

Colleagues, just to inform you, our NDP colleague and friend, Mr. Masse, is having technical issues joining the committee, so I suggest that we keep his time for whenever he arrives.

In the meantime, we will skip to Mr. Perkins. The floor is yours for five minutes.

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

Thank you, Mr. Chair.

The Verschuren Centre, since you became the green slush fund chair, has received $11.2 million of taxpayer money from other Liberal government departments. My understanding from looking at it, and from what you said, is that it incubates green technology companies and has some companies of its own.

Do you have a financial interest in any of the companies that it incubates?

[Annette Verschuren]

No, zero. I don't have any financial interest in the Verschuren Centre, and I don't have any financial interest in any of the companies that work with the Verschuren Centre.

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

Do any of the SDTC green slush fund directors have a financial interest in any of those companies?

[Annette Verschuren]

I don't think so. I can check that for you, but I don't believe so.

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

If you could check, and just send that in writing, I'd appreciate that.

[Annette Verschuren]

I will.

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

You obviously have read the SDTC act regarding the Liberal green slush fund.