Public Accounts Committee on June 13th, 2024

[Simon Kennedy]

We're working on that now with the new board, which, as members may appreciate, was only recently appointed.

The issue of recoveries, I think, is pretty clear. Monies that were paid out to ineligible activities should be recovered.

My organization does that. When we discover there's money that goes to an ineligible activity, we offset that with future payments if it was an honest mistake, or we recover the money because it wasn't supposed to be paid out. We would expect SDTC to do the same. We will be taking measures with SDTC to make sure those steps are taken.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

What level of accountability do you take as deputy minister of this department for the recovery of this fund?

[Simon Kennedy]

There are two things here.

One of them is our agreement with SDTC. That is the principal instrument we use. We would have to look at the kinds of methods or steps we're able to take through the contribution agreement to help effect that. The actual recoveries have to be done by SDTC.

[Inaudible—Editor] the legal point, Mr. Chair, but just for the member's question, the legal—

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

I understand.

[Simon Kennedy]

Okay.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

In relation to the contribution agreement, you're saying that you can take all matters that you have.... At least, I hope you would take all powers you have under the contribution agreement to actually recover funds of ineligible expenses. Is that what you're saying?

[Simon Kennedy]

Yes, that's right. For example, if there is—

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Why wouldn't you, at the onset of this work, knowing that there were already instances of conflict of interest coming back in an internal audit as early as 2018, undertake the work of making sure your contribution agreements actually had that kind of power to begin with? Absent of my questions on transparency, why doesn't it have a basic level of accountability when it comes to even recovering projects for ineligible funds? It sounds as if you're describing a limitation.

[Simon Kennedy]

No. Just to be clear, what I'm saying is that we agree with the importance of recovery of funds. Any measure we take has to be through the ambit of the contribution agreement. It was just simply to note, as I said at the outset, that we are not directly administering these funds. This is not like this money is—

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Just because of time, could you table with us your plan to have this money recovered to our committee, please?

[Simon Kennedy]

I think, as I said in response to the last member's question, we will be happy to come back with a fuller picture of what we are doing in response to the Auditor General's findings.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Can it be a detailed plan, in writing, please?

[Simon Kennedy]

I think, as we normally do, we have a written follow-up plan to the public accounts committee. We'll be very happy to do that.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

I'm sorry that I have to ask basics, but there's been a basic level of misconduct here, and I would appreciate your understanding the gravity of the situation and our need for basic documents.

[The Chair, Conservative, John Williamson]

Mr. Desjarlais, I think, if I'm going to read this a bit, Mr. Kennedy is telegraphing that they're in the process of sorting this out and he's prepared to come to us and update us on that progress.

Perhaps we'll do that after the summer recess, so I'm going to let his answer stand. I realize that you're trying to get an answer now, but I just don't think they're in a position to provide it yet. I'm hoping that will come—

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

At least by the summer, then.

[The Chair, Conservative, John Williamson]

The committee will pick it up again, and we might well have Mr. Kennedy back.

Mr. Perkins, you have the floor for five minutes.

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

Thank you, Mr. Chair.

Mr. Kennedy, last week the former Liberal minister of industry, Navdeep Bains, was in the industry committee testifying on this issue.

He began by saying that his only responsibility for the green slush fund was actually appointing the directors. When I questioned him on his five appointments—Annette Verschuren as chair, Guy Ouimet, Andrée-Lise Méthot, Stephen Kukucha, who was the former Liberal organizer in British Columbia, and the fifth one, a government person who chaired their governance committee—I asked him if he was aware that all of those folks were basically funnelling—shovelling—money to their own companies. He declared amnesia at even appointing them and didn't remember anything. It was very useless testimony.

Then, when I asked some of the staff, including a former PMO staffer who worked at SDTC at that time, she also declared amnesia. I guess that's the Canadian version of taking the fifth. What I need to know is, why did Minister Champagne not fire any of these directors?

[Simon Kennedy]

I think that's a question probably best put to the minister. I don't—

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

You provide him the advice.

[Simon Kennedy]

I think it would be better, if there's a question about why a minister didn't take a certain action—

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

Did you provide him advice to fire these five?

[Simon Kennedy]

I think, as members will know, deputy ministers don't discuss their advice to ministers in a public setting.

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

I hear that. You're taking the fifth.

I want to know, then, going forward.... These five directors feather-bedded maybe almost as much as $400 million to companies they had financial interests in. I was able to find out through the Internet, on my own, about $150 million of it. It's readily available on public sources.

I want to know that, in going forward in your new world with this, one, we will ensure that we try to get some of that back and, two, that the fund, under NRC control, will not have business with the companies that these people have already taken a huge amount of money for in abusing their public position for their own interest—they will be banned.

I don't buy.... Because there was no chair of this fund in its 20 years before Annette Verschuren, who had a conflict, I don't buy that you can't find people without a conflict to put on the board. That's a failure. I want to know, going forward, will you ensure that they no longer get to skim taxpayer money anymore from this fund, when they've gotten almost $400 million already?

[Simon Kennedy]

I think I would say that we believe that the fundamental structure of this organization has contributed to these problems. The design of the statute is such that people are going to be on the board who are at high risk of conflict. I think the move to the NRC, actually—