Public Accounts Committee on Sept. 5th, 2024

[The Chair, Conservative, John Williamson]

Thank you very much.

We will call the vote on the amendment to the motion. Voting yes signals that members would like to strike part (b) in the motion. Voting no signals that members would like to keep the motion as it was presented by MP Perkins.

(Amendment negatived: nays 6; yeas 5 [See Minutes of Proceedings])

The amendment is defeated. I'm going back to the list now, and next is Mr. Desjarlais.

However, before we turn to Mr. Desjarlais, I will ask Madame Sinclair-Desgagné whether she wishes to speak to the motion.

No? All right.

Mr. Desjarlais, you have the floor. Because I know there are many caucuses meeting next week, I am requesting extra time for this afternoon to get through this and the business at hand.

Mr. Desjarlais, you have the floor to speak to the motion as tabled by Mr. Perkins in its entirety.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Thank you very much, Mr. Chair.

Of course, it's not always my preference when we dispute on matters of document or evidence secondment, particularly in this case. I do note the concerns of my Liberal colleagues. I also hope that we can all see that this is an order for the production of information. It is relevant to our study. Information is important. It is our job to get more evidence in this kind of committee to best inform what will be a report related to the very serious nature of SDTC. I hope we can process this in an orderly and quick fashion and get on to some other business of the day.

I'd ask for my colleagues' support in attempting to get this to a vote.

[The Chair, Conservative, John Williamson]

Thank you, Mr. Desjarlais.

I have Ms. Yip speaking next.

You have the floor, Ms. Yip.

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

Thank you.

I'd like to move an amendment to replace the “seven days” with three weeks, because seven days is a short amount of time. The regular process for production is a minimum of three weeks across all committees. I don't think it's quite fair for members to request these documents in such a short time span. The standard of three weeks really should be respected to ensure that nothing is missed, that translation is adequately conducted and that the committee stands by its precedent on this.

[The Chair, Conservative, John Williamson]

Thank you very much, Ms. Yip.

I have an amendment to the motion to change the time from seven to 21 days. Those are calendar days.

Mr. Perkins, you have the floor.

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

I would point out the contradiction of MP Yip, who said that the House already has them. Therefore, they should be able to produce them. They wouldn't need three weeks if the House already has them.

[The Chair, Conservative, John Williamson]

Thank you very much.

We will call a vote on the amendment to the motion. Voting yes signals that members would like to extend the deadline to 21 calendar days. Voting no signals that members would like the motion to remain as is, with a seven-day deadline.

(Amendment agreed to: yeas 6; nays 4 [See Minutes of Proceedings])

I'll turn back to the motion as amended.

Go ahead, Ms. Khalid.

[Iqra Khalid, Liberal, Mississauga—Erin Mills, ON]

You said, “the motion as amended.” I'm wondering what the amendment was.

[The Chair, Conservative, John Williamson]

It was your colleague's amendment to extend the timeline from seven days to three weeks—21 days.

[Iqra Khalid, Liberal, Mississauga—Erin Mills, ON]

Perfect. Thank you.

(Motion as amended agreed to: yeas 6; nays 5 [See Minutes of Proceedings])

[The Chair, Conservative, John Williamson]

The motion as amended is passed. Thank you.

I'm now going to suspend for five minutes before we come back for committee business. We'll see you all back here in five minutes.

This meeting is suspended.

[The Chair, Conservative, John Williamson]

I call this meeting back to order.

This is now committee business. As agreed to on Tuesday, we'll resume the debate on the motion originally moved by Mr. Perkins on June 20, 2024.

Mr. Perkins, you have the floor. You might want to start by just reading the motion into the record.

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

Sure. Thank you, Mr. Chair.

I had an opportunity to speak to this a bit in the last meeting, so I won't prolong it and have a long discussion. However, as a reminder for those who are watching, the motion—again, with regard to SDTC, or the green slush fund—is as follows. We all agreed to deal with it today.

I moved:

Given, the Auditor General's audit of Sustainable Development and Technology Canada, and given that government appointed board members approved:

(a) $59 million towards ten ineligible projects;

(b) $76 million towards 90 projects in which board members had conflicts of interest and violated internal conflict of interest policies, and in violation of the Canada Foundation for Sustainable Development Technology Act;

(c) $259 million towards 96 projects where board members held conflicts of interest; and

(d) $58 million towards projects without ensuring contribution agreement terms were met;

the committee therefore expresses extreme concern with the blatant disregard of taxpayer funds, and therefore calls on the Minister of Innovation, Science, and Industry to recoup these funds for Canadians taxpayers within 100 days following the adoption of this motion, and that the committee report this matter to the House.

We have had meetings, and we will have more meetings on it, but we have had both the Ethics Commissioner's report and the Auditor General's report. These numbers are straight from the Auditor General's report. They're not from some sort of extensive research by my team and my office or by me. Those numbers are actually even worse. It will suffice for the purpose of this motion to leave it to the findings on the 186 conflicts out of 226 sampled projects.

I understand that in the Auditor General's audit period, over 400 projects were approved, totalling $832 million. The Auditor General looked at only 226 of more than 400 projects, and found that 82% were conflicted. By that matter, rough math would say that over $600 million probably went out conflicted. However, the Auditor General didn't do the detailed audit of that; hence the motion when the committee last met, which asks the Auditor General to do a deeper dive into all those transactions.

In this case, I think we know enough already to ask the committee to express our concern to the House. The deputy minister of finance, Simon Kennedy, actually said before committee that some of these funds should be returned. In fact, the National Research Council—which had witnesses here this week—in its own scandal during the Chrétien government actively went out and recouped the money that was stolen during the process of awarding NRC contracts. The individuals were convicted and the money was recouped by the NRC.

There is a history of the government under the Liberals trying to recoup the money when it's been acquired by people inappropriately. That's what this motion instructs the minister to do. The minister needs to give direction. He has not found the time in all his extensive travels since his press release to meet with the NRC, as was admitted yesterday by the president of the NRC. He hasn't met with them to talk about how to improve the governance. He cares so much about improving the functioning of this thing that he has not held one meeting with the NRC, which is supposed to clean it up.

Because of that, because of the inaction of the minister and because his own deputy minister said in committee that the money should be recouped, we are asking that it be done. This is because we have no confidence that without the action of this committee and the demand and expression to the House to do that, any attempt will be made by Minister Champagne or his officials to do the right thing and get this money back.

[The Chair, Conservative, John Williamson]

Thank you, Mr. Perkins.

Ms. Khalid, you have the floor.

[Iqra Khalid, Liberal, Mississauga—Erin Mills, ON]

Thank you very much, Chair.

I really appreciate the care that Mr. Perkins has provided. I think he's absolutely right that this committee has a very significant role to play in how public funds are used, where they're used and the level of accountability that should surround them as they're used. Absolutely, the role of this committee is to ensure that we're holding that use of funds to account, whether it's through the reports of the Auditor General, which have raised significant concerns on this issue, or whether it's through a number of other avenues that have come to light in which we realize there are issues here. I do appreciate Mr. Perkins' motion, although I have some concerns with it. I'll raise them point by point.

Given the number of meetings we've had on this issue, and given the scope and the broadness of what the questions from members have been, I think perhaps we need to expand this to not just SDTC and the minister for ISED but also the entire Government of Canada. Let's see where else and how else.

The reason I propose this is that, based on the testimony from the witnesses that we've heard thus far on this, and becoming a little bit more familiar with the intricacies of how money is provided, I think there are multiple ministries—or departments, I should say—that would be implicated in terms of that return of money.

First off, you have to find the root. The matter is a little bit more complex than the black and white that is presented here and that is presented by a lot of the questioning by my colleagues. I think it would be more worthwhile for us to say that it should be the Government of Canada that should be responsible, rather than just the innovation minister.

I don't recall specific testimony, but as I have sat through these meetings, I think there were indications made by witnesses that this is beyond the scope of what the specific minister has in his purview. Given the contribution agreement between ISED and SDTC, I'm sure SDTC would also be implicated in recuperating the funds, but we also know that it was an arm's-length organization at the time. While the minister is evidently accountable here, ultimately, even though he took significant steps to make sure that his responsibility as an overseer was maintained—and he took those necessary steps and I think acted responsibly throughout this whole process—I do think that making this small tweak to broaden it to the Government of Canada would take into account the particularity of the situation, the complex nature of the process and what exactly this motion would ultimately be asking for.

Second, I do have some challenges with the 100-day timeline. I know that we pass a lot of motions through a lot of committees asking government officials to either produce documents or come to appear before a committee, but I think we need to take into account the complexity of how this will happen. A timeline of 100 days would not, in my opinion, help us figure out how to retrace, how to navigate and how to deal with the challenges of what this motion is asking.

Members in this committee have reminded us repeatedly that parliamentary committees are supreme and that they have the ability to do what what they're asking. However, we also want to make sure that what we're asking for is reasonable. I'm not sure where the 100 days is coming from. I don't know if Mr. Perkins has perhaps done his own evaluation to determined that this is how long it would take for them to go through this complex process or if this is just an arbitrary number. I'm not really sure where the 100 days is coming from.

We're trying to ensure that the transition to the NRC will be smooth. It's also to ensure that there's the least amount of disruption to businesses, as they've already known great disruption over the year. It's been reported in the media just how much these small businesses have been disrupted by the freezing, etc. Two-thirds of the companies went through business interruptions, as was reported, and many more have said they're unable to find any alternative funding, which goes entirely against the program's objective.

[The Chair, Conservative, John Williamson]

Ms. Khalid, perhaps I can just interrupt you. The floor will be yours again.

Have you proposed an amendment?

[Iqra Khalid, Liberal, Mississauga—Erin Mills, ON]

I'm just going through my reasoning, and then I'll propose the amendment at the end.

[The Chair, Conservative, John Williamson]

Okay, thank you. I didn't want the moment to slip by and it not to be heard.

Okay. I'll turn the floor back to you.

[Iqra Khalid, Liberal, Mississauga—Erin Mills, ON]

Absolutely. Thank you very much, Mr. Chair.

As I was saying, following the freezing of funds, two-thirds of companies went through business interruptions, and many more revealed that they were unable to find alternative funding. Now, this has resulted in layoffs and people having to sell off portions of their businesses. These are not the people who are implicated here whom we are talking about; these are respectable small businesses that have stake, that are trying to expand, that are trying to scale, that are trying to do the right thing, within the industry here in Canada.

Putting a time frame to the recouping of the funds could place a significant stress on these businesses. I don't see why we couldn't just limit the motion to calling for the recouping of funds without putting any additional pressure on these businesses with a set timeline, especially knowing that we don't know the complexities of how this process will work and knowing the pressure that businesses are under right now, that SMEs are really working hard in all of our ridings across the country to try to make things happen while also dealing with this challenge.

I'd also like to remind colleagues that these are small companies in Quebec, whether they're in Sherbrooke or in Salaberry-de-Valleyfield, and in Thornhill, in Calgary, in Victoria. These are communities that are ours, and I think that we need to be more mindful here.

Parliament has taken issue with the way things were done at SDTC, and we're not—and should not—be looking to punish or add additional stress on the businesses that are impacted here. I also want to remind my colleagues that placing these businesses under any type of scrutiny, as we're technically calling for with this motion, will make it difficult for them to get any type of additional financing, private or otherwise.

I'll pause here and remind committee members that the majority of the businesses that have taken advantage of this program are, in fact, eligible. They are doing the right thing. They are trying to grow their business in an ethical and safe manner within our industry here in Canada. In addition to funds being recouped, they're also going to have difficulty in finding additional funding, and we're really putting them in a very difficult position. No third party will want to pour money into a business that is facing this type of scrutiny or is part of an investigation. Again, I want to be very clear that what we're doing here is not scrutinizing the legitimate businesses that take advantage of this program, that are able to hire more employees, that are able to scale up their businesses, to get to where they need to go.

Again, I advise our members on this committee to act with caution. There is a balance here that we need to make sure we maintain. I agree 100% that scrutiny is important. I agree 100% that wrongdoing should be punished. However, the collateral damage of small business in my country is not acceptable to me at all, and I think that we need to be a little bit more mindful in how we're conducting this. These businesses have already lived in a lot of difficulty following the freezing of funds, as I mentioned earlier, so let's please be mindful of what exactly we're doing here.

I would propose the amendment, Mr. Chair, as I've talked about, the two specific changes that I'd like to make to this motion.

First of all is to strike “Minister of Innovation” and to replace it with “the Government of Canada”.

The Minister of Innovation is likely not the only participant, as I said, in this type of process, so broadening it to “the Government of Canada” ensures that we're including all players and can hold the broader government, including the minister, to account here. It's a small tweak and it remains true to Mr. Perkins' intent with this motion.

The second change I would make to the motion would be to remove the sentence “within 100 days following the adoption of this motion”.

I will park my comments there, Chair, and reserve the option of being put at the bottom of the list, should there be need.

[The Chair, Conservative, John Williamson]

We have an amendment to the motion. It is to change “the Minister of Innovation, Science and Industry” to “the Government of Canada” and then to strike “within 100 days following the adoption of this motion”.

As is my custom, I'll turn to Mr. Perkins to see if he has any comments to make about the double amendment to his motion.

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

I would be more open to it being “the Minister of Innovation and Government of Canada”.

I really think the 100 days is important to get this process going. This fund has been frozen for a while. The Auditor General has produced a number and a list of companies that have been funded and the Auditor General has produced a list of how much money was given to them, so that process can begin. If more come up through the continued examination of this or, hopefully, the additional review by the Auditor General, then those can be added to the list at the time, but there's no reason not to start.

I appreciate the comments of MP Khalid in terms of the impacts on the companies and working through those, but I think leaving it open-ended means it will probably never get done, so there needs to be a bit of urgency to it, to my mind.

Thank you.

[The Chair, Conservative, John Williamson]

Thank you. Mr. Perkins.

Go ahead, Ms. Khalid.

[Iqra Khalid, Liberal, Mississauga—Erin Mills, ON]

Thanks, Chair.

I wanted to put on the record what the actual impact is, so I want to cite a company that we're dealing with here. This was quoted in the news, in The Globe and Mail:

QEA Tech was planning an ambitious international ramp-up of its energy-efficiency technology last October when basically this whole controversy pulled its legs out from under it.

To that point, the Markham, Ont-based company - which uses drones to identify points of energy loss from high-rise buildings - had every reason to believe it was in line for $10-million from the federal agency Sustainable Development Technology Canada. That funding was key to a $25-million scale-up project involving 500 buildings in Canada and internationally, partly because it was validation for property companies with which QEA planned to partner, as well as for other investors.

Then amid allegations of mismanagement, primarily involving conflict-of-interest and human-resources processes as well as some funding decisions that exceeded its mandate,

—which had nothing to do with QEA—

SDTC abruptly had its funding powers suspended by the government.

Seven months later, they still haven't been restored, and QEA has had to put its plans on hold. Rather than expanding,

—as was their original mandate and their plan—

it's imposed a hiring freeze and let go three of its 22 employees. And it's lost face among the project partners, from whom it had worked hard to get letters of intent on which SDTC funding was conditional.

“We got discredited amongst these companies,” Peyvand Melati, QEA's founder and chief executive officer, said in an interview. “And we had no answer for them.”

There are currently hundreds of similar stories across Canada's clean-tech sector, many of them worse, even if other entrepreneurs are more reluctant to go on record with them.

SDTC is - or was - the country's most important government entity for helping those types of companies avoid falling into the so-called valley of death, in which proponents of promising technologies prove unable to get first commercial projects off the ground. Its records show that, cumulatively spending $1.2 billion on grants since 2001, it has helped grow companies that have created over 24,500 jobs.

The point I'm trying to make here, Chair, is that yes, our work is very, very important, but at the same time, we have to make sure our clean-tech sector is able to thrive and is able to do the work that this sector is designed to do. I think the amendments I have proposed really help us find that balance. It's not fair for us to punish collaterally the entirety of the clean-tech sector for the role of a few small bad apples and the conduct of a few board members within the SDTC. I think we as a committee need to be more vigilant, more responsible and more reasonable in how we are conducting ourselves.

I've seen, Chair, through committees—not just this one, but across the board—how businesses get hauled in and get defamed, questioned and interrogated. They get put on the quote-unquote stand or whatever. I'm sure Mr. Brock would know the terminology a little bit better than I would. They get put through the wringer, ultimately. What that does is decrease trust within our industry, an industry that Canada is renowned for—the clean-tech sector. If we are not doing right by the industry and by innocent small businesses that come up with brilliant ideas to grow this sector, then what exactly are we doing here? Absolutely, we need to make sure that public accounts, taxpayer dollars, are receiving, dollar for dollar, the value that they have, which is the sweat and tears of Canadians.

That money is there to enable us to grow our industry. It is to grow the work we do in our country, to grow our economy and to ultimately ensure the well-being of all Canadians. If we are now vilifying in many ways that clean-tech sector and those small businesses, I think we have a problem here in how we're conducting ourselves.

Therefore, I would again implore members of this committee to make these two amendments. They will help us ensure that we get to the objective of what Mr. Perkins is asking for, which is the recouping of funds, in a reasonable and practical way, by expanding the scope. Rather than saying just ISED, let's look at everywhere else within the government departments where this may happen, so that we can get to the conclusion we're trying to get to.

Also, let's make sure we're striking a balance for that clean-tech sector to ensure that it's able to conduct its business without being vilified through this whole process.

Chair, I believe what I'm asking for is quite reasonable, and I'm really hoping that all colleagues across the aisle will support me on this. This has nothing to do with politics. This has nothing to do with clickbait. What I'm trying to do is make sure that we are going forward, as is the purpose of this committee, with reasonable accountability for public funds within all corners of the public sector and within the government, as per the recommendations of the Auditor General.

I put it to committee members that we put forward these two amendments. Let's accept them and move on with the day.

Thanks, Chair.

[The Chair, Conservative, John Williamson]

Thank you, Ms. Khalid.

Mr. Perkins, I assume you'd like the floor. It's yours.

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

Thank you.

A couple of responses to MP Khalid's intervention come to mind.

First, on a couple of factual things, this committee has had only a couple of meetings on SDTC and the green slush fund. Most of the meetings have actually been held in the industry committee, and most of the witnesses have been there. That's just to be clear, because I know some of this stuff about which committee has dealt with what can get confusing.

While the story reported about that particular company was interesting, I've been through the Auditor General's list, and that company is not on the list. You're confusing that company with those that have gotten money against the rules of the program. That company was not one of them. That company was caught up in the minister's freezing of the funds. It applied for new funds and hasn't been able to get funding since it was frozen because of the Liberal corruption in this fund.

To say that somehow every government department is responsible for this.... I'll remind Liberal members that when we pass estimates for departments, departments are responsible for the money. This money is given by Parliament to the industry department—not to any other department. The industry department signed contribution agreements that, as of this day, are comprehensive but secret. Those restrict how the foundation spends that money. The Auditor General has identified the breaches and which companies got money illegally, outside of the contribution agreement. From Parliament to the industry department to Sustainable Development Technology Canada—that's the line. I don't want to confuse people out there. Not every government department is giving money. The $390 million that was given, either through conflict of interest or outside the parameters of ISED's deal with Parliament, was to those targeted companies. I have the list of companies, if you want it. It was interesting to hear about that company. That one's not on it. That wasn't one of the conflicted companies identified by the Auditor General.

For anybody who's listening, that was an attempt by the Liberals to confuse this issue and to cast aspersions on every company out there, but it is only 82% of transactions by the Liberals on this board in that five-year period that we're talking about. Eighty-two per cent of the companies awarded money by the Liberal appointees on that board were identified by the Auditor General. Those are the ones we're talking about in this motion, not some other fanciful motion. This motion deals with the numbers outlined in the Auditor General's report, which was aimed at those companies that received money in a way that was contrary to what Parliament authorized.

I would think Liberals would be concerned by that, but apparently they're not. I'd think Liberals would want the minister responsible for the industry department—even though it might harm his leadership ambitions—who for 40 months saw this money through, who had an assistant deputy minister in every single meeting during which the 82% of transactions were done.... He was there. It's beyond fathomable. It's beyond any believability that, while he had a departmental official in every meeting, for 40 months he knew nothing about what was going on.

I know you want to spread it to every minister, but I don't think it's fair that every other minister in the Liberal government be trashed by that statement that says they're also responsible for this ineptitude. I'm defending your cabinet colleagues by saying they weren't responsible for the oversight of this. Minister Champagne had the responsibility. A billion dollars was given to him to be put into this fund, and he ignored it. He didn't ask a question. In fact, he stood on stages with Annette Verschuren, giving these monies out to these companies. I can show you the pictures. He's very proud of them. They're all over his Twitter feed. He went and said, isn't this great? I'm giving away your money in the green slush fund with the chair who had conflicts of interest in situations that were likely all either against parliamentary appropriation rules for the money or against the conflict of interest guidelines, but that's okay. That's okay for this minister.

He wants to blame everyone else, though, or at least this member of Parliament wants to blame everyone else in their cabinet and not this minister. He needs to be held accountable for the fact that he can do it. The least we can do is to ask him to finally stand up and agree with his deputy minister, his own deputy minister, that these funds should be paid back. He has not said it once, so we need to order him to do it.