Public Accounts Committee on June 13th, 2024

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

Thank you, Mr. Chair.

Ms. Hogan, has it often happened, in your career, that the organization you had just audited was abolished on the day you submitted your report?

[Karen Hogan]

No, I have to say this is the first time.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

Right.

You made a number of recommendations to Sustainable Development Technology Canada. This was a radical measure, simply shutting a fund down and transferring its activities to somewhere else in the government.

[Karen Hogan]

That is a policy decision. As long as all the failures I identified are corrected once the fund is in the public service, I will be happy.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

That is exactly what I wanted to get at. Perfect.

Mr. Kennedy, all of the Auditor General’s recommendations in the report have been accepted. Although the decision to shut down Sustainable Development Technology Canada had probably already been made, you accepted the recommendations. How are you going to make sure the problems do not simply follow the fund and the personnel?

[Simon Kennedy]

Thank you for the question.

I think it is important to note that when we received the results from Raymond Chabot, we made an action plan and asked the Sustainable Development Technology Canada board of directors to implement it.

I can’t speak for the Auditor General, but, if I understand correctly, the elements of the action plan addressed a large number of the Auditor General’s concerns. That said, we can do more, for example regarding the recommendations relating to Innovation, Science and Economic Development Canada. We have already made progress. We have already made a lot of changes to the organization that already exists, which may put new structures and processes in place that are much more robust than before. The idea is to move everything to the National Research Council of Canada.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

I have been contacted by numerous companies whose funding has been suspended. Can you tell them when the subsidies and funding they were promised will resume?

[Simon Kennedy]

I can confirm that the process for granting the companies these funds has already started. It is already under way. I think that is a good question, but you would have to ask the new chair of the board directly. He could talk about the plan that his organization has put in place for taking rapid action.

We are already working with it on starting the funding process back up. We have determined that all the measures in the minister’s action plan have been put in place. We have verified that the organization has made changes. We are therefore comfortable with the idea of moving forward on the new funds. However, it is ultimately the new chair and the new team who are responsible for that.

[The Chair, Conservative, John Williamson]

Thank you.

We're turning now to Mr. Desjarlais.

You have the floor for two and a half minutes, please.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Thank you very much, Mr. Chair.

Mr. Kennedy, are you familiar with the term greenwashing?

[Simon Kennedy]

Yes, I certainly have heard that before.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

You're likely aware, then, that part of its definition is a claim to being on track to reducing a company or asset's polluting emissions to net zero when no credible plan is actually in place. Is that correct?

[Simon Kennedy]

It's fair to say this would be one possible example. Yes, I agree with that.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

The Auditor General states there were projects that SDTC, as a matter of fact, “did not establish targets for the environmental benefits of projects”, but required applicants to quantify benefits in their applications. Also, of the projects assessed by the Auditor General's Office, 12 of 18 did not meet their stated emissions reductions by at least half.

That's a huge difference, wouldn't you say, Mr. Kennedy?

[Simon Kennedy]

I would agree with the findings of the Auditor General, absolutely.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Would you agree, if you're agreeing to both these terms, that in many ways the SDTC fund is an example of greenwashing, especially the failed projects?

[Simon Kennedy]

This is something we have to follow up on with the new management team at SDTC. I think it's important to note—

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

It's all good and well to think about what's going to happen next, Mr. Kennedy, but the purpose of this committee, this audit and this report is to make very clear the failures that have taken place so that we can make sure they never happen again. I'm looking for your clear advice on what is, to me, a very obvious and explicit example of greenwashing in a government program that has funnelled billions of dollars into the hands of those who said they would reduce emissions. As we see, a majority of projects that were examined failed to do that.

Mr. Kennedy, I need only a very clear response from you: Is this a good example of greenwashing within the government?

[Simon Kennedy]

What I would say is that we agree with the findings of the Auditor General. We agree that there needs to be enhanced oversight of the activities of SDTC, particularly with regard to adherence to the contribution agreement.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Is it greenwashing, Mr. Kennedy, yes or no?

[Simon Kennedy]

I've given the answer I'm giving on this question.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Auditor General, do you think this is greenwashing?

[Karen Hogan]

What I would raise is that some of these projects were meant to fund innovation, which means they're about new technology that's never been tried before. Some of them will fail—

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

It's 12 out of 18.

[Karen Hogan]

—but that's what innovation is about.