Evidence of meeting #99 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.
6:25 p.m.
Founder and managing partner, Cycle Capital, As an Individual
May I answer, Mr. Chair?
6:25 p.m.
Founder and managing partner, Cycle Capital, As an Individual
I had to recuse myself way more often than that because I also declared apparent conflicts. There were board meetings where I was absent. In addition, only four businesses in my portfolio received money from SDTC while I was on the board. If they received any before or after I was involved with SDTC, they weren't in a conflict-of-interest zone, as it's technically known in governance terminology.
What the board decided before I arrived and after I left doesn't concern me.
6:25 p.m.
Liberal
The Chair Liberal Joël Lightbound
Thank you very much, Ms. Méthot.
Mr. Perkins, your time is up.
Mr. Sorbara, the floor is yours.
6:25 p.m.
Liberal
Francesco Sorbara Liberal Vaughan—Woodbridge, ON
Thank you, Chair.
Welcome to the witnesses, one in person and one virtually.
Obviously, a number of questions were asked today.
Welcome to the committee, Ms. Méthot.
I have taken a look at Cycle Capital, the firm that you are integral to—if I can use the word integral. It's obvious that your firm has been around for a while. You have made probably a lot of investments into a number of companies, and for those investments you obviously check out the corporate governance structure of all companies you would invest in.
It sounds as though you sit on a few boards. You sat on the board of SDTC, and, if my understanding is correct, you sit on the Infrastructure Bank board, which obviously acknowledges your experience and so forth within the investment industry.
How would you judge the corporate governance structure that was in place at SDTC during your tenure?
6:30 p.m.
Founder and managing partner, Cycle Capital, As an Individual
I want to make sure I clearly understand your question. It concerns the governance structure. Is that correct?
6:30 p.m.
Liberal
6:30 p.m.
Founder and managing partner, Cycle Capital, As an Individual
SDTC is a foundation. When I arrived, the foundation had been in place for some years. As my colleague who is on the screen said, a robust governance was in place in which people recused themselves and declared their conflicts of interest in advance. It was very well structured, but poorly recorded in the minutes.
6:30 p.m.
Liberal
Francesco Sorbara Liberal Vaughan—Woodbridge, ON
Okay.
Chair, I do want to put on the record that with regard to the chair of the board, Annette Verschuren, whether she's the chair or not or independent of that, she was a maximum donor to the leadership campaign of Mr. Jean Charest.
We heard from the other side—and we're just having some interruptions there from the other side, from a gentleman most times, so I will say that again. Annette Verschuren was a donor to Jean Charest's campaign. There was some insinuation that being a Liberal was this or that, and it was unfortunate that was pointed out.
To the gentleman who's attending virtually, what was your experience with SDTC?
6:30 p.m.
Chief Executive Officer, R-Hauz, As an Individual
I was a board member from 2016 to 2022.
6:30 p.m.
Liberal
Francesco Sorbara Liberal Vaughan—Woodbridge, ON
You sit on the board. You have your quarterly meetings or monthly meetings, however it's structured. Someone should be there to take minutes. You have been around for 20 years. There should be some sort of passing-the-baton experience. There's in-house counsel.
Can you explain and give us some granularity on that?
6:30 p.m.
Chief Executive Officer, R-Hauz, As an Individual
I stand by my earlier comments, in which I viewed the processes of governance associated with the board to be excellent. The diversity of board members, the robust discussions, the policies in place around conflict of interest, obviously specific to today's discussion, were rigorously maintained and monitored.
I suppose maybe there's some debate as to whether or not the process for minutes was comprehensive enough in various details. Clearly, they were lacking in some corners. They were certainly sufficient as we as board members saw them at the time.
The addition of new board members was very carefully considered and, again, rigorous in the sense that we were looking for the right sort of diversity of voices and balanced discussions at the board level, so the process for bringing in new board members was always about trying to make the board better.
6:30 p.m.
Liberal
Francesco Sorbara Liberal Vaughan—Woodbridge, ON
If I could interject, when there are contribution agreements signed with companies, I take it the board would look at all the investments that were decided upon by SDTC. Is that correct?
6:30 p.m.
Chief Executive Officer, R-Hauz, As an Individual
Just to look for a little clarification in your question, are you asking whether the contribution agreements, well after a board decision was made to approve a grant, came back to the board?
6:30 p.m.
Liberal
Francesco Sorbara Liberal Vaughan—Woodbridge, ON
Yes. Did they come back either before or after? There would have been a process by the investment committee whereby it would have said yes or no, yea or nay, and the then board at some time would have to review those decisions.
6:30 p.m.
Chief Executive Officer, R-Hauz, As an Individual
The decisions to invest in a company were made at the board level after thorough review and debate by various committees leading up to management- and board-related committees, but the actual review of contribution agreements was not something that was routinely brought back to the board. They were part of management's responsibilities.
6:30 p.m.
Liberal
The Chair Liberal Joël Lightbound
Thank you very much, Mr. Sorbara.
We have a hard stop at 6:38. That gives us four more minutes. I will give two to Mr. Lemire and two to Mr. Masse.
Mr. Lemire, the floor is yours.
6:30 p.m.
Bloc
Sébastien Lemire Bloc Abitibi—Témiscamingue, QC
Thank you, Mr. Chair.
Ms. Méthot, the type of expertise needed to analyze green and emerging technology investment projects, and especially to appreciate their economic potential—they involve a lot of venture capital—must be quite rare.
It must be quite demanding to bring all those people together around the table, and it must have been even more difficult a few years ago, no?
6:35 p.m.
Founder and managing partner, Cycle Capital, As an Individual
About 15 to 20 people were starting to develop that expertise in Canada 15 years ago. A lot more people and organizations are doing it today, which is excellent news.
6:35 p.m.
Bloc
Sébastien Lemire Bloc Abitibi—Témiscamingue, QC
As I understand it, the Canadian government itself didn't have the necessary expertise to analyze these types of projects. The people working at Natural Resources Canada and elsewhere in the industry are very good at evaluating oil and gas projects especially.
Earlier, you said that there's half as much investment in green technology businesses in Canada as there is in the United States. I'd be curious to see a comparison between investments in green technologies and those made in oil. Even today, when you talk about subsidies to oil companies, there's an enormous imbalance. Do you sense that imbalance?
Is the federal government itself able to assess the potential of green and emerging technology projects now as compared to during the COVID‑19 pandemic or to 2015?
6:35 p.m.
Founder and managing partner, Cycle Capital, As an Individual
This is an emerging sector, and there can be a great advantage for both the private and public sectors to be working on it.
You mentioned the oil and gas industry. I've had very positive experiences with people from the oil industry. For example, Mark Little, a former president of Suncor, is one of our directors. These people have a major contribution to make.
I believe that everyone can make a contribution because we need to build this quickly. We have only a few years ahead of us to slow down climate change, and—
6:35 p.m.
Bloc
Sébastien Lemire Bloc Abitibi—Témiscamingue, QC
Do you think that a study like this one, which aims to discredit Sustainable Development Technology Canada, is also a way to discredit investments in green funds?
6:35 p.m.
Founder and managing partner, Cycle Capital, As an Individual
I hope not.
6:35 p.m.
Bloc
Sébastien Lemire Bloc Abitibi—Témiscamingue, QC
Mr. Chair, I have a motion I would like to introduce, if I may.
6:35 p.m.
Liberal
The Chair Liberal Joël Lightbound
The floor is yours, but it should be related to the matter before us today.