Evidence of meeting #133 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.
Conservative
Rick Perkins Conservative South Shore—St. Margarets, NS
On the conflicts that were outlined by the Auditor General, the Auditor General took a sampling over five years of 226 projects during the time of the five-year audit. There were over 400 that the board approved at the time, and the Auditor General took a sampling of 226. Out of that 226, 186 votes in the board had a conflict. In other words, in 82% of the sample that the Auditor General took, board members were conflicted.
It sounds to me like the board members were overrepresented in the allocation of the roughly $800 million—$836 million—that those votes represented. Eighty-two per cent were going to conflicted board members.
We've had testimony before the committee that when you were appointed with a managed conflict—the first chair in the history of the SDTC to have a conflict and be appointed to chair this board—the culture changed. In fact, fellow board members and the former president testified that one board member said, “Oh, we can manage conflict, so I'm going to bring some projects back.”
Isn't it true that your leadership created a culture of conflict of interest that led to 82% of board members receiving a vast majority of the funds, over $330 million, for companies in which they had a conflict of interest? That wasn't happening before.
While you say it was done innocently, when 82% of board members, including yourself, are voting for things involving a conflict of interest, that doesn't look innocent; that looks like a plan.
Annette Verschuren
The investments that SDTC made over the years were all invested in projects that included capital for labour, for capital equipment. All investments were spent and audited, and an enormous amount of due diligence went into the process.
Conservative
Rick Perkins Conservative South Shore—St. Margarets, NS
Are you telling me the few board members who were on that board, the nine who were identified by the Auditor General as having conflicts of interest, represent 82% of the invested interest in green technologies in Canada? There is statistically no way that this could be true.
The result is that your interests were represented in 82% of the votes, “your” being the board members and the board that you led, so there was something going on that was way different from what a public office holder should allow.
Annette Verschuren
The decisions.... SDTC undertook a lot of due diligence. The commissioner referred to technical violations in his report on the work that he did with me. I think that there are—
Conservative
Rick Perkins Conservative South Shore—St. Margarets, NS
Eighty-two per cent of votes are not technical breaches of conflict of interest. They're real breaches. One particular board member's conflicts led to over $200 million going into her companies, including over $100 million while she was on the board. It's the same thing with Mr. Ouimet, with about $10 million, and Mr. Kukucha with $25 million.
This appears to me to be a systemic plan and groupthink says, “Together it's okay, because we've all got managed conflicts. You leave the room when yours is up, and I'll leave the room when I'm up.” It must have been tough to get quorum since so many of your directors were conflicted.
Liberal
The Chair Liberal Joël Lightbound
Give a brief answer, Ms. Verschuren, and then Mr. Perkins' time is up.
Annette Verschuren
We obviously followed the processes that were in place. We obviously declared our conflicts. It was critically important that we followed those and that we followed procedure.
SDTC is an organization that really works and invests in the entrepreneurs in our country.
Liberal
Chandra Arya Liberal Nepean, ON
Thank you.
I'm an immigrant. I came to this wonderful country 20 years back. Whenever I travel abroad and meet my family, relatives and friends in other countries, I always say that one of the things I am proud of is that Canada is corruption-free. With my knowledge of a lot of my colleagues in the House of Commons, I can say they are corruption-free. Unfortunately, though, your actions that I've been seeing lately are things I can't defend.
I can say the first instance was a mistake. I can also say the second instance was a mistake. However, 24 times are systemic. When we include 82% of your fellow board members, it's an insider's club.
Canadians trusted that the SDTC would be at arm's length from the Government of Canada when it was formed. The government made it arm's length so that it could get professionals to manage the taxpayers' funds ethically and productively, keeping the the decision-making away from the politicians. However, you and your board destroyed it.
I joined politics with three objectives. My third objective was to ensure that Canada remains at the forefront of the knowledge-based economy that's growing the world over. I was on the board of Invest Ottawa, where one of the major objectives was to promote knowledge-based industries in the city of Ottawa. When SDTC was first formed, I was very happy. Many of us were very happy that clean technology was getting the boost that is needed. However, in a few strokes, you and your fellow board members destroyed it. I'm very sorry to say that.
As I said earlier, one time is a mistake, but not 24 times. Even now, after reading the commissioner's report, do you think it was a technical mistake?
Let me go back. I looked up the difference between conflicts of interest and corruption. It's a very thin line. There are a lot of grey areas, but when a number of instances of conflict of interest happen in a short period of time and they happen among very few members, they go to the side of corruption.
Do you agree with that?
Annette Verschuren
What happened here was about the designation of abstaining versus recusing myself, in terms of the conflict of interest. That was the thing the commissioner identified that I did not live up to, and I should have lived up to that. I recognize that.
However, I have no direct interest in any of the companies other than the one I declared 18 months before I became chair. I have no direct interest in any of those organizations. There is a perceived conflict, yes, but there's no direct investment.
Liberal
Chandra Arya Liberal Nepean, ON
What you're saying is is that you had a conflict of interest, but no direct investment.
I was in the private sector before I got elected. I understand how things often work: You scratch my back and I'll scratch yours. Again, if it had been a simple mistake about the definition of declaring conflicts or recusing yourself, and it were limited to that, I would have agreed. However, the numbers don't give us any comfort. It happened 24 times and with 82% of the board members. How could this continue to happen?
I'm so sorry. In my view, this has resulted in a great institution, which was formed with the very good objective of trying to promote clean technology in Canada, being destroyed.
Are you happy with the outcome of what has happened to the fund and what has happened today? What is your reaction to that?
Annette Verschuren
It is my understanding that SDTC is going to be managed in NRC, and the minister has made those moves to continue to sustain and operate that organization. It is a great organization.
Again, we are aware that there are investigations going on today to dig into this area, to look at the processes at SDTC and how those investments were made and how those conflicts were declared.
Liberal
Chandra Arya Liberal Nepean, ON
I understand that NRC is administering it, and I do have a lot of respect for the professionals at NRC and other departments in the government, but they are bureaucrats. The purpose of setting up SDTC and bringing in professionals from the private sector was that they are the people dealing with cutting-edge technologies who can understand the new technologies and who can envisage the importance of technologies. The entire premise was that the professionals from the private sector would take this thing further.
You know, government bureaucrats can do things, but they don't have the same sort of knowledge, expertise and connections within the industry to gather what is happening there.
Liberal
The Chair Liberal Joël Lightbound
Thank you, MP Arya. That's all the time you had.
Mr. Garon, you have the floor for six minutes.
Bloc
Jean-Denis Garon Bloc Mirabel, QC
Thank you, Mr. Chair.
Ms. Verschuren, I was kind of shocked by your opening remarks. I've read the Conflict of Interest and Ethics Commissioner's report. We've all read it. It criticizes you very harshly. It criticizes your management very harshly. It criticizes your judgment very harshly.
Liberal
The Chair Liberal Joël Lightbound
Sure, but first, we'll make sure the interpretation is working.
Can you hear him? Yes? Okay.
You can start over, Mr. Garon.
Bloc
Jean-Denis Garon Bloc Mirabel, QC
Thank you, Mr. Chair.
Ms. Verschuren, can you hear the interpretation?
Liberal
The Chair Liberal Joël Lightbound
Okay. Perhaps, Madam Verschuren, you're not on the right channel, so you just need to adjust.
Liberal
The Chair Liberal Joël Lightbound
Yes. There's a button, which I think looks like a little globe, and you need to select the English channel.