Industry Committee on Nov. 7th, 2023

[The Chair, Liberal, Joël Lightbound]

Good afternoon, everyone.

I call this meeting to order.

Welcome to meeting no. 95 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 Standing Order 106(4), this meeting was requested by members of the committee to discuss the possibility of undertaking a study of the recent fact-finding exercise report on Sustainable Development Technology Canada.

We'll begin by discussing the meeting request.

Mr. Perkins, you have the floor.

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

Thank you, Mr. Chair.

Thank you, committee members.

Maybe I could do a quick outline. This company, the SDTC, is actually set up at arm's length, as we know, from the government. It's not like a Crown corporation. It's a separate foundation that was set up in 2001.

About 10 or 12 years ago, it was a bit of a mess. The government of the day changed the board and brought in a board chair to clean it up, who hired a new president to try to clean it up, and it got a gold star from the Auditor General in 2017 for governance. In 2019, on a week's notice, the former minister of industry changed the board chair to the current chair, as well as a couple of members. The result of that was a restructuring of a number of the funds and the investment processes.

Now, in my view, the current chair should never have been appointed. She had a conflict of interest going into it in that SDTC had given her company a $9.5-million grant, which had to have continued follow-up from the company. This set a different tone for the organization about conflicts of interest.

As a result of that, a number of whistle-blowers came to the minister and to the Privy Council Office in January to outline a whole series of questionable transactions and relationships between the board and a number of the companies. It wasn't only companies receiving grants from this organization, but also companies that were hired from the outside to do evaluations of each grant proposal and their questionable relationships with board members.

As we know, when you sit on a corporate board—I've sat on private and Crown corporation boards—it's not just about a real conflict of interest; it's about the perceived conflicts of interest. Those are just as important in our business as well. It appears, from what has been reported on by whistle-blowers, that there are many instances not only of conflicts but of restructuring the funds outside of the mandate letter or the mandate agreement they have with the government.

The Liberal government, 35 months ago, gave this organization $750 million more of taxpayer money. The current minister became the minister one month after that, so he's been overseeing this organization for 34 months, yet was totally unaware of the governance changes and the investment process changes in this organization, to which his ministry had just given three-quarters of a billion dollars of taxpayer money.

The result of those whistle-blower comments.... I'll outline that those whistle-blowers are doing something unusual, because they're not protected by government whistle-blower policy, which is an issue. They have come out and put themselves on the line. They are not protected by the Government of Canada's whistle-blower policies.

Because these conflicts are so egregious, as the committee that's responsible for the reporting of the operations of the industry department—otherwise known as ISED—the minister, all its Crown corporations, its agencies and its financial estimates, which includes the financial accounting and public accounts of the expenditures of ISED and all its organizations, including SDTC, we need to take a look at this now.

It is true that the current minister, upon receiving this, asked for what is called a fact-finding report from Grant Thornton, which has been presented. A very narrow mandate was given to it. It was much narrower than the accusations that were made.

However, we also know from the media last week that a number of senior ISED officials called this the greatest scandal of taxpayer money we have had in the government—it may be $100 million or more of taxpayer money allocated in a conflict—since the sponsorship scandal of the Chrétien government.

I believe it's incumbent upon this committee to examine, as is our responsibility to Parliament, the expenditures, processes and impacts of all these management and governance changes at this organization for which the industry department is accountable.

I understand, Mr. Chair, that this requires a motion, which I would like to put forward now. I think the clerk has copies, if she would like to distribute them.

I can read this, and then we'll presumably have a bit of a discussion here in the committee about it.

I move that, in relation to the recent investigation and report on Sustainable Development Technology Canada, otherwise known as SDTC, showing a breach in conflict-of-interest rules and misuse of public funds, the committee undertake a study of up to six meetings to investigate these allegations; that the committee invite the following witnesses to appear before the committee: François-Philippe Champagne, Minister of Innovation, Science and Industry; Doug McConnachie, chief financial officer and assistant deputy minister of corporate services at Innovation, Science and Economic Development Canada; Annette Verschuren, the current chair of SDTC; whistle-blowers who have come forward; and any other witnesses deemed relevant to the study put forward by parties—I would probably also put forward the president of SDTC as a witness we should hear from—and, subject to the approval of the recognized party whips and the availability of meeting time slots in the House of Commons, that the committee hold additional meetings and/or extend our current committee meetings by one hour on each allotted day for each meeting on this matter with the goal of not delaying the study of Bill C-27.

That's the motion. The idea is to give the committee two options. We could add additional meetings, which I know is more difficult, but I think from our whip's perspective, they would work to find the resources. The easier solution, since we meet on Tuesdays and Thursdays, is to add an hour to the meetings after the Bill C-27 testimony for the next number of meetings to consider this.

With that, I will turn it back to you, Mr. Chair, for others to comment.

[The Chair, Liberal, Joël Lightbound]

I have Mr. Masse and Mr. Lemire.

Just for precision, Mr. Perkins, one possibility that you've highlighted in the motion is for one more hour at the end of the meetings. Would that count as one meeting, by the terms of your motion?

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

Yes.

[The Chair, Liberal, Joël Lightbound]

Usually, meetings are two hours. Okay.

I have Mr. Masse, Mr. Lemire and Mr. Turnbull.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair.

Thanks for agreeing to start the discussion on this with a motion that we can work with.

I agreed to this meeting because of a couple of things—my interest in whistle-blowers and in protecting them. I've talked to some of the former employees there. We had the minister at the ethics committee yesterday. My primary concern in all of this is obviously due process, but the position I've also taken is to provide the workers who are still there with equivalent public service jobs if they want to leave that agency and go on a lateral move somewhere else within the civil service. It's something that we can do to protect them. It probably would also ensure that the process the minister is going through right now is thorough.

For me, it's about protecting those families who are there. That's the bottom line. The agency gets away from an environment that actually has a union. The agency gets away from greater accountability to protect the public servants. Even though their salaries are virtually 100% paid by the public, they are not protected in the same way. I see this as an entire issue over social justice and the abuse of workers. Until we actually have those guarantees in place, I'm prepared to meet as much as possible to continue to bring that message forward on a constant basis. I'll be a broken record on that, because I think it is something we can control.

When I'm talking to the different people who were there and who have moved on, I can tell in their voices the sincerity and the concern. In terms of mental health, some of them have gone on stress leave. There are not enough employees there for them to hide if they're one of the ones coming forward. I know that a third party lawyer has been engaged, but I don't necessarily trust that process either.

I'll conclude by supporting this motion until the government provides some assurances to those workers beyond what the minister is saying right now. I repeatedly went after the same thing through three exchanges. I'm still not satisfied. Those people have to live through this process. The longer it goes on...it's problematic. If this parliamentary system right now will expedite that, then I think that's better for them than actually going through a long-drawn-out process if they do want to get out of this environment and they have no choice.

That's the preference that I have and that's the position that I have at this time. Thank you very much for your time and for bringing this forward.

[The Chair, Liberal, Joël Lightbound]

Thank you, Mr. Masse.

Mr. Lemire, you have the floor.

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

Thank you, Mr. Chair.

I want to thank Mr. Perkins for requesting this meeting. In the interest of transparency, I should add that I would have been happy to add my name to the request had the French version been made available to me earlier. That would have made three parties and six members requesting this meeting to address a worrisome situation involving the use of public funds.

I support what my colleague said about protecting whistle-blowers. That is a crucial aspect of our democracy.

I'd like to propose an amendment to the motion. First, I'd like to suggest that we have two meetings, not six. If they are short, one-hour meetings, we can compromise. However, in the interest of saving time given our very full agenda with our study of Bill C‑27, I suggest changing the wording.

Instead of directing the committee to invite specific witnesses, we could propose that all information obtained in Standing Committee on Access to Information, Privacy and Ethics meetings on this matter be shared with the Standing Committee on Industry and Technology, including past and future testimony and, in particular, that of Minister of Innovation, Science and Industry, Mr. François‑Philippe Champagne. I would leave the other four points unchanged.

We can give ourselves the option of inviting witnesses back as needed and inviting any other relevant witness so we don't have to invite them all. The meeting could take place after the whistle-blowers testify at INDU so we can get the supplementary and complementary information that will make our study even more comprehensive because I think our committee is in the best position to study this kind of motion.

[The Chair, Liberal, Joël Lightbound]

Mr. Lemire has proposed an amendment.

Mr. Lemire, members may ask you to repeat it because it is rather long. If I understand correctly, essentially, you're suggesting that we set aside four hours for this study rather than six meetings; that the information gathered by the Standing Committee on Access to Information, Privacy and Ethics be shared with the Standing Committee on Industry and Technology; and that we not be obliged to invite everyone on the list of proposed witnesses.

Do I have that right?

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

I propose that we give ourselves the option to invite certain witnesses back if necessary. However, I think it's important to schedule this after the Standing Committee on Access to Information, Privacy and Ethics' study and the whistle-blowers' testimony. I would like us to make a complementary contribution to the study, not do the same study twice.

[The Chair, Liberal, Joël Lightbound]

Perfect.

We're now debating the amendment proposed by Mr. Lemire.

If it's on the amendment, I have Mr. Turnbull, Mr. Vis and then Mr. Perkins.

[Ryan Turnbull, Liberal, Whitby, ON]

I'm not sure if I fully understand the amendment. I understand that it's to have two meetings instead of six, and then to perhaps have the sharing of witness testimony from other committees, so there's no redundancy in terms of who we hear from at this committee. Could I check, without yielding the floor, whether Mr. Lemire can confirm that's what he's suggesting?

[A voice]

Yes.

[Ryan Turnbull, Liberal, Whitby, ON]

Okay.

I want to make some general remarks on this amendment and on the motion as a whole to let you know where I stand on it, or where we stand. I won't speak for all my colleagues here, but it's safe to say we take this matter seriously. There were allegations of mismanagement. The minister has known about those and hasn't been sitting on his hands. He's acted, as you know, as Mr. Perkins said. You've probably heard the testimony the minister gave last night at the ethics committee. I know Mr. Perkins and Mr. Masse were both there.

Mr. Masse, I know you got to ask the minister questions, which is great.

We know the minister asked for an independent review of the agency based on the allegations of mismanagement. That review has been completed. That has resulted in an action plan and the freezing of the accounts of SDTC. All of this is public knowledge. On top of that, the Auditor General is doing an audit, so we know that process is under way. We also know our ministry has also hired a firm to do an HR management review as a parallel process to the Auditor General's audit. We also have two other committees looking at this. Public accounts and ethics are looking at the very same topic, and both are doing a study.

Was I wrong about that?

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

I think it's only ethics.

[Ryan Turnbull, Liberal, Whitby, ON]

My understanding is that public accounts has had the deputy auditor general appear, and they are talking about this matter as well.

Do you want to clarify that?

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

It's okay.

[Ryan Turnbull, Liberal, Whitby, ON]

I can get you evidence of that if you dispute that, but that's my understanding.

There are two other committees at least that are looking into this, so I am wondering why it is that our committee.... I understand that as many committees as desire to do so can do this work, but, to me, we have important government legislation, Bill C-27, which we have all said is a priority for our country. It's legislation that hasn't been updated in 20 years, so I think we all agree that it's a high priority.

What are we trying to accomplish here by having another committee do the very same work that two other committees are already undertaking in Parliament?

What I would say is that this feels like there is a lot already being done. The government has been very transparent, open, diligent and willing to co-operate with the Auditor General, and it takes the matter seriously. We've said numerous times in the House of Commons.... I've answered many questions about this in the last few weeks and said that we really take the federal agencies and the standards of governance they uphold seriously and that they need to be held to the highest standard and held to account. We think, from our perspective, that we're doing that.

This feels like a bit of a delay tactic for Bill C-27. That's what I am going to say, because, for me, what is it that this committee is going to do over and above those other two committees that have already started to undertake this work? They've heard from key witnesses. Members from this committee have gone over and subbed in and participated in the ethics committee, just as of last night.

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

I was listening.

[Ryan Turnbull, Liberal, Whitby, ON]

You were there, and you heard the testimony. You were listening in and—

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

That's why I need to do it.

[Ryan Turnbull, Liberal, Whitby, ON]

—auditing the committee—

[The Chair, Liberal, Joël Lightbound]

Mr. Perkins, this is not an exchange. Mr. Turnbull has the floor.

[Ryan Turnbull, Liberal, Whitby, ON]

It's okay. I appreciate that, Chair.

The point is this: If another committee or multiple other committees are doing this work, what is the need for this committee to have an emergency meeting to undertake this very same work, which is happening in other committees?

That's what I see, and I am not saying that this isn't an important issue, by the way. I agree that it's important, but why would we have three committees doing the same work in parallel? That seems like a waste of resources and time, and we have important government legislation that everybody has said is very important.

I would say that those are the key points I want to put on the record.

One other thing that I didn't mention is that the redacted report has been provided to committee members at the other committee, I believe at ethics, so they have a redacted copy of the report that has only confidential information taken out. That report has been made available to those committee members.

Key for me is how we ensure that we're not duplicating efforts, because I think we all agree that our time is valuable and that we want to do useful work. This study is being undertaken at ethics, which seems to me to be the most appropriate place for it to happen, to be honest. If members are talking about conflicts of interest, that relates to the ethics committee's work. It seems to me that we don't need three studies going on in parallel.

Maybe others want to comment on that, but I would say that I do appreciate Mr. Lemire's attempts at amending the motion, because I think it would hopefully enable us to alleviate delaying our work on Bill C-27, which I appreciate very much.

[The Chair, Liberal, Joël Lightbound]

Thank you, Mr. Turnbull.

For members who are questioning, those aren't bells for a vote. That was for a quorum call. That's why we don't need unanimous consent to continue.

Would it maybe be useful for members to have Mr. Lemire read into the record again the terms of the amendment, or is it well understood by everyone?