Public Accounts Committee on Sept. 3rd, 2024

[Mitch Davies]

Mr. Chair, it's not a question that I'm in any position to address directly. It would have to be addressed to the individuals involved.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

I'm sorry; are you saying you can't answer that?

We're here adjudicating the question of the conflict of interest of board members. I'm asking you if any of the current members of the interim board have issues of conflict of interest. Why can't you answer that, sir?

[Mitch Davies]

Mr. Chair, the interim board in no way reports to NRC. It doesn't fall under any jurisdiction we have in terms of our policy for conflict of interest.

Obviously, the appointment process used for those interim board members is what applies to their appointments. Any work that was done to review matters of conflict of interest I can't speak to directly from NRC.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Okay.

It's been nine years. You have board members who are benefiting directly from decisions of the board, sometimes stepping out of the room when those decisions are voted on and sometimes not. At present, we have a board where there may or may not be continuing issues of conflict of interest. That underlines the fact that despite all the discussion around this scandal, the government has not fundamentally changed what's happening.

The proposed future transition to these decisions is under the auspices of the National Research Council. This committee has studied the problem of public servants themselves owning companies or being involved in companies that have benefited from government contracts. Can you tell us, sir, with respect to this future proposed transition to the National Research Council, if any National Research Council employees have investments in companies that receive funding through this slush fund or in companies that could receive that funding?

[Mitch Davies]

Mr. Chair, in regard to conflict of interest of our employees, it's explicitly clear that they are not to have investments in companies with whom they are working. Absolutely that's reviewed when they join us, and it's reviewed on an ongoing basis. It's quite critical, obviously, given the matter of the real conflict of interest that would put them in if they were to do so, let alone any involvement in the past that could have a concern around any potential conflict of interest.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Thank you.

In the time I have left, I will ask you this: Would any ministers, political staff, PCO staff, PMO staff or anybody who could be involved in directing NRC's decisions be able to have investments in companies that benefit from disbursements through this green slush fund?

[Mitch Davies]

Mr. Chair, the way I can answer this is that the administration of a program at the National Research Council is conducted by our staff. It's under their professional judgment, in the system we have—

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

However, I think the public would still like to know, and it's just a yes or no. Would PCO employees, political staff in the minister's office, ministers, and PMO employees be able to have these kinds of investments in companies that are benefiting from the slush fund?

[Mitch Davies]

Mr. Chair, I can't really speak to any—

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Just answer yes or no.

[Mitch Davies]

—given employees who are not under my care or responsibility in their offices, but they don't have anything to do with our administration and decision-making on investments we make of public funds—

[The Chair, Conservative, John Williamson]

Thank you.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

It sounds like it would be—

[The Chair, Conservative, John Williamson]

Mr. Genuis, that is the time. You will have an opportunity again to revisit this.

I'll turn now to Ms. Bradford, who is joining us virtually as well. You have the floor for five minutes.

[Valerie Bradford, Liberal, Kitchener South—Hespeler, ON]

Thank you, Mr. Chair, and thank you to the witnesses for being with us today.

In his announcement, the minister said that this move would be done to increase oversight over SDTC. Have you reviewed the AG's report, and is this something that the NRC is equipped to do?

[Mitch Davies]

Mr. Chair, yes, I personally read the recommendations of the report and the observations made, and the response that's been made as well by SDTC to the report.

Given the role that we're going to play in the future in this transition, all of those observations are very important. Obviously, the structure of the foundation itself, which was commented on in prior testimony here, doesn't apply in the case of the NRC, so there's a very strong distinction in what existed before and what will exist after the transition.

I think the most important area that I'd observe is just the need for ongoing vigilance and solid practice in conflict of interest, even if it's a matter of perception. You know, we have public servants who are professionals working full time for us, so they're pretty busy. Their job is not just to run the programs that are entrusted to their care, but also make sure that everyone understands that they maintain and conduct themselves in a way that people can't question. I think that's very important to us.

[Valerie Bradford, Liberal, Kitchener South—Hespeler, ON]

To that point, can you speak broadly as to what the NRC's responsibilities would be in overseeing SDTC?

[Mitch Davies]

Mr. Chair, our responsibility is to deliver the benefits of the program that the government asks us to deliver. In this case, it would, in some ways, be very similar to the kind of programming that we've worked with for over 75 years, which supports innovation and entrepreneurship. That's a really solid part of the current activities of the NRC IRAP, and it's very much something that's at the heart of what we do.

I think the important addition here is also to pursue sustainable development technology for the benefit of those clean technologies for the environment for Canadians, and that's an area where we are already working. We have, obviously, a research goal and a strategic goal in climate and sustainability, but we'd also have expertise joining us from SDTC to help us adjudicate those files and assess the benefits from a sustainable development point of view.

There would be really two ways to look at a file and find those that have the strongest attributes that meet the terms and conditions of the program and that we're happy to conduct business with on an ongoing basis. That'll be our goal—and to deliver the benefits of the program that Canadians expect.

[Valerie Bradford, Liberal, Kitchener South—Hespeler, ON]

What, then, is expected of SDTC, in turn, as a result of the transition?

[Mitch Davies]

Mr. Chair, I think the transition is to conduct this on an expedited basis to bring some stability that's needed to the clean-tech sector and the stakeholders in that sector so that we can get back to business.

Second, I think it's also important that we take into account that there have been employees at SDTC who have been involved in this and are looking for certainty in terms of their own careers, and we look forward to making offers to them so that they can join our team.

Then, third, I think the expectation is for the program to carry on with a high level of confidence that it's being done in a manner that's consistent with public objectives and scrutiny in terms of the way we conduct ourselves in delivering the program.

We actually have a lot of work to do and a full mandate on a number of levels to respond to this situation, and we're happy to be there to do that for Canadians.

[Valerie Bradford, Liberal, Kitchener South—Hespeler, ON]

What are the communication channels like between SDTC's board and members and officials at the NRC?

[Mitch Davies]

Mr. Chair, we have regular meetings with the interim board, particularly with Marta Morgan. I think the board member who was here previously sort of talked about how the board has divided up its work. Ms. Morgan is responsible for working with us on the transition. We meet regularly to take account of all the lines of activities—there is a lot of work involved in bringing this program into the NRC—so that we're well aligned and coordinated with them.

We also, of course, await the work that's being done between the department and SDTC on the files and preparing them for transfer. Then we're doing the kinds of work you'd expect on systems and preparing ourselves, from an HR point of view, to be able to make offers to the employees and get this done as soon as possible.

[Valerie Bradford, Liberal, Kitchener South—Hespeler, ON]

Okay.

The AG appeared at the industry committee last December and spoke to how the complaints of HR violations fell out of the scope of the study. As we all know, the minister then tasked an independent third party investigation into the reports of HR violations at SDTC.

As a result of the transition, will SDTC's HR protocol be aligned with NRC's?

[Mitch Davies]

Mr. Chair, I think the most direct way to respond to that is to ensure that everyone understands that the way personnel are managed and the way we work with our employees will apply to any employees who join us from SDTC and with all that this brings, creating a good workplace and a good environment for them to thrive and make their contribution.

Obviously, there are strong mechanisms as well. If they have concerns, they can raise those through the various systems we have in place. That's up to and including, if they have an issue and they want to disclose something that they're not comfortable with, being able do that inside the organization. That's well established. Obviously, there's a parliamentary role there for an officer to look into those questions if employees go to that office to ask for a review of any wrongdoing.

We have a strong regime that applies to human resources at the National Research Council. That will apply to all the SDTC employees who join us.

[The Chair, Conservative, John Williamson]

Thank you.

We'll begin our third round with Mr. Perkins. You have five minutes, please, when you're ready.