Public Accounts Committee on Sept. 3rd, 2024

[Jean Yip, Liberal, Scarborough—Agincourt, ON]

Thank you.

The SDTC's role is also known to support Canada's clean-tech firms. Can you tell us what the mission statement is in terms of the clean-tech firms?

[David Lisk]

Is that for SDTC?

[Jean Yip, Liberal, Scarborough—Agincourt, ON]

Yes.

[David Lisk]

I'm sorry. I can't quote their mission to you. Their key role is to work with firms that are bringing innovative clean-tech technologies into the marketplace for the benefit of Canadians.

[Jean Yip, Liberal, Scarborough—Agincourt, ON]

How will you ensure that this mission of clean tech is back at the core of what SDTC does?

[David Lisk]

When the program transitions over, it will operate with the same mandate, which is to deliver benefits to Canadians by the deployment and commercialization of clean technologies across Canada and internationally. As we stand up the program inside of IRAP, that mandate will be maintained, with the additional construct that our current programming also supports clean-tech firms but at different stages than in SDTC. We will be able to bring forward more companies into the SDTC programming suite to be evaluated and to be able to be selected as the best companies.

[The Chair, Conservative, John Williamson]

Thank you, Ms. Yip.

Ms. Sinclair‑Desgagné, you have the floor for two and a half minutes.

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

Thank you, Mr. Chair.

In terms of how the NRC manages all the projects in its portfolio, what conflict of interest guidelines do you have and what have you learned from the SDTC situation?

Have you learned anything from the Auditor General's reports?

[Mitch Davies]

Mr. Chair, the NRC has a conflict of interest policy that applies to all of our employees. It was revised in 2021 in response to our own audit committee looking for improvements in the program and the way we administer it. I'd be happy to provide details on the policy to the committee, if that would be of interest.

I would say there's a significant program across the entire organization to ensure that everyone understands what they're obliged to do. They're trained on it, and there's due follow-up under the policy, as you would expect.

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

Thank you, Mr. Davies.

Conflict of interest is one thing, but another issue is project eligibility. How does the NRC handle that internally?

Does it have external audits done, other than by the Office of the Auditor General of Canada, to make sure all projects that get public funds are actually eligible and that we don't wind up with another SDTC situation?

[David Lisk]

Mr. Chair, the situation around projects and whether they are eligible will rest with the Treasury Board terms and conditions that we receive with respect to SDTC, and also for the IRAP programming. What we do is establish assurance, through our review process, that all projects that are brought forward do fit within that Treasury Board guidance.

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

Who looks after that internally? Is there an internal audit team? Who's really making sure?

Having Treasury Board guidance is one thing, but following it is another. Unfortunately, it looks like a number of organizations aren't following that guidance, including SDTC and other Crown corporations.

[Mitch Davies]

Mr. Chair, in answer to the question, there are two levels. Obviously, the staff that are involved in adjudicating the files and actually making the decisions are working as a team. They document their support through a file, and then it proceeds through the system. We then also have follow-up work that's done to audit and undertake compliance reviews of the support we provide and ensure that it is consistent with the terms and conditions. In the very rare cases when we need to recover because of any reason that we've reviewed in the audit, we will do so. Of course, at the NRC we also have an audit committee, which can work with our internal audit function to ensure that the programs are being run in line with their terms and conditions.

A multi-layered approach is taken, but it really starts with the working level and doing the job well and documenting what we do. Various checks and balances, with reviews and internal scrutiny, are then undertaken to ensure that we've done that. We make any necessary changes and improvements that we have to over time.

[The Chair, Conservative, John Williamson]

Thank you very much.

Up next is 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.

Thank you to the witnesses, again, for being present and for answering our questions.

I want to return to the topic of the review process, or at least the new review process, and the changes that have been recommended, largely by the Auditor General.

What aspects of the review process, in addition to your internal auditing, will enhance the eligibility review of existing projects funded by SDTC?

[Mitch Davies]

Mr. Chair, as I was sharing in response to the previous question, reviewing eligibility is really at the core of any of our examinations of investments that will be made to provide funding to any business. That will certainly apply in the case of the programming we offer for sustainable development technology purposes. Staff has to document it and make sure that it's well established—

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

I'm sorry for interrupting, Mr. Davies.

Specifically on the existing applications that were approved by the former board of SDTC, for which there are outstanding funds, would they be subject to the former eligibility criteria, under which they may have been successful before the suspension of funding, or would they fall under the new guidelines, which may potentially disqualify them?

[Mitch Davies]

Thank you for the clarification. I understand the question.

There's a process under way now between the department, ISED, and SDTC on the eligibility of the files they have, which will ultimately be transferred over to the NRC and then carry on under our new terms and conditions. There is work being done on eligibility. It's not work that we're directly involved in. It's something that SDTC is doing, and it's working with the department on it.

We will establish terms and conditions that will be approved by the Treasury Board for any ongoing role of NRC IRAP in funding clients on an ongoing basis, but that work is being undertaken right now between the department and SDTC. It doesn't involve NRC in any direct way.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Mr. Davies, do you believe there's clear leadership in the transfer of this file? That was one of the concerns highlighted by the Auditor General. We had members, including the deputy minister and the board itself, unsure of their own roles and responsibilities. From the way you're describing this, I have some concern that it could be a potential issue that is unresolved.

Do you feel that the terms that you've been asked to fulfill as the transfer of this work continues are clear?

How much does SDTC's current voluntary board have to do with the existing terms and conditions that you'll be subject to?

[Mitch Davies]

Mr. Chair, from our point of view, the process is clear. We're working actively with SDTC on the transition, and SDTC is working with the department on the contribution agreement that's currently in place between the department and SDTC.

We keep these things clear for a reason, because there are different parties involved. We're not involved in things between the department and SDTC, but equally, we're very much engaged with SDTC on the planning of the transfer, because we have to make sure that we hit our milestones and do this in a seamless fashion.

There's a lot of work involved. I wouldn't underestimate that. Of course, other witnesses have spoken about the work that's being undertaken on that as we speak.

[The Chair, Conservative, John Williamson]

Thank you very much. That is the time. You will have one last opportunity in the next round, Mr. Desjarlais.

Mr. Brock, we'll go back to you for five minutes, please.

[Larry Brock, Conservative, Brantford—Brant, ON]

I want to return to Minister Champagne's announcement to Canadians in June of this year, which gave the impression that the NRC would provide that oversight sooner rather than later. What we're learning now is that the NRC is not going to provide any oversight until the end of Q4, which is March 31, 2025.

In the interim, it's literally the same old SDTC, just under a different chair and three different directors. It has the same employees. Nothing has changed. Funding has started. Taps started to run again in June, raising the question of the type of oversight that is being exemplified by this government. According to the press release, the minister indicates that his department, ISED, will “enhance oversight and monitoring of funding during the transition period.”

How often is Minister Champagne involved in discussions with the NRC, giving it updates about his observations and supervision of funding? How often are you meeting with him?

[Mitch Davies]

Mr. Chair, at the NRC, I and my employees are not meeting directly with the minister on the topic. We work with the department of ISED. Of course, as we've also mentioned, we're working with the SDTC interim board and employees.

[Larry Brock, Conservative, Brantford—Brant, ON]

Are you as the president not communicating directly with the minister?

[Mitch Davies]

On this topic, actively involved on the transition, we're working with all the officials and individuals who have the day-to-day job—