Evidence of meeting #127 for Public Accounts in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was foundation.
A video is available from Parliament.
11:35 a.m.
NDP
Blake Desjarlais NDP Edmonton Griesbach, AB
I have a point of order. I find it misleading to suggest that the NDP in any way appointed these individuals. I think the Auditor General can confirm that.
11:35 a.m.
Conservative
The Chair Conservative John Williamson
That's a point of debate.
I would suggest, since Mr. Perkins is on the clock, that he just laser-focus in on his question here.
11:35 a.m.
Conservative
Rick Perkins Conservative South Shore—St. Margarets, NS
In the appointments that were made by the Liberal government with the support of the NDP to the green slush fund, five of the seven directors, as a group, voted themselves—186 times—money for companies they owned, in a conflict of interest.
Isn't the easiest way to avoid a conflict of interest to not have the government organization you're representing or on the board of do business with your companies?
11:35 a.m.
Auditor General of Canada, Office of the Auditor General
I just want to talk a bit about how the board members were appointed to the foundation. Half of them are appointed by the—
11:35 a.m.
Conservative
11:35 a.m.
Auditor General of Canada, Office of the Auditor General
I'm going to get to the answer.
Half of them are appointed through the Governor in Council process, which is supposed to be a process that's independent. We did not look at that—
11:35 a.m.
Conservative
11:35 a.m.
Conservative
The Chair Conservative John Williamson
Order.
Mr. Perkins, we're listening to the auditor. There will be no more interruptions. There will be other opportunities if you're unsatisfied with the answers, but we find that Ms. Hogan does get to the point.
Ms. Hogan, you have the floor.
Your time has expired. This is extra time that I'm giving to Ms. Hogan to respond to your question.
11:35 a.m.
Conservative
The Chair Conservative John Williamson
Mr. Perkins, if you're not interested in a response, I will move on. There's a fair bit of chirping coming two ways.
Ms. Hogan, you have the floor, please.
11:35 a.m.
Auditor General of Canada, Office of the Auditor General
The other half of the board of directors is appointed by this member council. They're supposed to represent the Canadian population and the industry.
When you have that composition of a board of directors, it is likely that you'll see conflicts of interest, which is why it is so important, if you want the expertise of the industry at the table, that you have a good process to manage conflicts of interest.
What we found here is that the foundation did not have that. In 90 cases, their records showed that members of the board had declared a conflict of interest and voted on giving funding, and that should not have happened.
11:35 a.m.
Conservative
The Chair Conservative John Williamson
Thank you very much.
Mr. Weiler, you have the last two minutes. It's over to you, please.
11:35 a.m.
Liberal
Patrick Weiler Liberal West Vancouver—Sunshine Coast—Sea to Sky Country, BC
Thank you, Chair.
Ms. Hogan, I want to touch on the last question I asked you.
You mentioned that there is an oversight role for ISED to ensure these conflict of interest rules are followed. I was hoping that you could expand on what you would like ISED to do in this regard.
Are you satisfied or encouraged with what you've heard from ISED to date to ensure that's going to take place?
11:40 a.m.
Auditor General of Canada, Office of the Auditor General
The department did provide a response to our recommendation, and it's actually a pretty good one to the recommendation.
On ISED's role when it comes to the oversight of a foundation, in this case they were required to inquire about conflicts of interest. As I mentioned in the previous answer, when you want to have individuals on the board who are knowledgeable in the industry helping to approve which projects get funding, it is likely that there will be situations of real or perceived conflicts of interest, and that's why they should be well managed.
ISED just received the minutes from the foundation and, as we noted, the minutes were not a good record. I would have expected that they would have been much more proactive in finding out about real or perceived conflicts of interest and the mitigation measures, and they just didn't do that. I will look forward to see how they're going to resolve this with this foundation and others that have a similar governance structure.
11:40 a.m.
Liberal
Patrick Weiler Liberal West Vancouver—Sunshine Coast—Sea to Sky Country, BC
I have a last question here.
Can you just explain the ethics violations reports of the findings and how those were received? Was that based on consulting with employees from SDTC or with every company that had received funding? I'm just curious to understand how you came about those findings.
11:40 a.m.
Auditor General of Canada, Office of the Auditor General
With the findings of the 90 conflicts of interest, the cases...?
11:40 a.m.
Liberal
Patrick Weiler Liberal West Vancouver—Sunshine Coast—Sea to Sky Country, BC
It's with the ethics violations.
11:40 a.m.
Auditor General of Canada, Office of the Auditor General
A board member, staff at the foundation and consultants at the foundation are all given the conflict of interest policies that exist in the foundation, and they must proactively declare when they have a link to an organization that may be applying for funding with the organization.
That declaration is then included in the minutes of the board of directors or the project review committee that looks at all of the projects. I would have expected that the foundation would be a little more proactive, then, to say, well, there is certain documentation you shouldn't get and certain conversations you shouldn't be part of, but because they didn't have a way to manage this, that proactiveness didn't happen.
It rested, then, with the individuals to recuse themselves. What we found is that the records did not show that this took place in 90 cases. They did show that it took place in 96 other cases. It's clear that at times it was well managed, but there are 90 cases that really were not properly managed.
11:40 a.m.
Liberal
11:40 a.m.
Conservative
The Chair Conservative John Williamson
Thank you very much.
I appreciate all of you coming in today.
I have just a couple of housekeeping points.
First of all, thank you to you, Auditor General, and to your entire team for kicking us off on another round of studies that we're going to take up as a committee.
For committee members, there will be a meeting this afternoon on the subject of “Report 2: Housing in First Nations Communities” at our regular time of 3:30.
For the OAG, there's been a request for several documents today. I believe we will get them as soon as possible. Those documents will be sent through the clerk and then distributed to members.
On the point from Madame Sinclair-Desgagné, I'm going to reaffirm the discussion and my view as chair, which is reinforced by the House administration. It is that, once these documents are sent to the public, they are deemed to be public documents. You can do with them what you like. I'm going to leave that for members to decide.
You can raise them in the House. You can write about them. You can do whatever you want with them. They are considered by the chair and the House administration to be public documents, unless, of course, the auditor comes forward and requests that a document not be made public. That has not happened today. They'll be sent to you.
Finally, just as a point for the auditor, I want to reiterate that I'm perplexed by this, and I'm sure we'll be coming back to it as a committee: In the report on cybercrime, the Canadian Radio-television and Telecommunications Commission has not validated your audit or seems to question the underpinnings.
11:40 a.m.
Auditor General of Canada, Office of the Auditor General
Thank you, Mr. Chair.
It's always concerning when an organization doesn't want to agree with the factual accuracy of our reports. I spent, personally, in addition to the team, a lot of time with the CRTC.
It boiled down to our just not being in the same place in terms of what the expectations are of them to discharge their responsibilities under the Canada anti-spam legislation, and the categorization of their own internal policies. When it comes to cases that affect the most vulnerable in our society—our children—they should have acted and properly alerted the RCMP, which is why I took that action.
11:45 a.m.
Conservative