Public Accounts Committee on Sept. 5th, 2024

[Patrick Weiler, Liberal, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

Thank you.

I understand the importance, particularly with the Canadian Energy Regulator, of managing those kinds of conflicts. I think in 2014 an individual who wrote the economic case for the Trans Mountain pipeline was brought onto the National Energy Board while that project was being reviewed. I know that's a really important process that needs to take place.

I was hoping you might be able to share with this committee some of the mitigation processes you've referenced that you take in cases of candidates who may have a conflict.

[Donnalyn McClymont]

I would just underscore that it's not up to us to decide. It really is the commissioner's responsibility to interpret, administer and adjudicate the legislation, so we would not make a decision in terms of what kinds of mitigation measures would be required.

However, I would say, just to try to be helpful here, that I know the commissioner has, on occasion, suggested that people set up ethical walls or, as in the case here, recuse themselves from decisions that involve their assets, holdings, or companies or if they have a family member. You'll see that from time to time, that they recuse themselves from all decisions related to that. I've seen colleagues at the deputy level who've had to do that, and we make sure that is known.

Some people have taken a step even further and have gone beyond what the commissioner has asked out of an abundance of caution and have recused themselves where he has not deemed it necessary; this is because people want to be very respectful of the spirit and the letter of the law.

[Patrick Weiler, Liberal, West Vancouver—Sunshine Coast—Sea to Sky Country, BC]

Thank you for that.

I do want to pick up on Ms. Yip's line of questioning, just about the transition to the NRC, the timelines and the processes.

At the same time as the transition plan was announced, the government also unblocked funds. We know that businesses lived through difficult consequences following the freezing of funds back in October 2023. Surveys showed that two-thirds of the companies faced business interruptions, and many more revealed that they were unable to find alternate funding. I know I've talked to many companies, even in my riding, that faced this. It has resulted in things like layoffs and people having to sell off portions of their businesses.

How does the unblocking of these funds interplay with the transition?

[Donnalyn McClymont]

Mr. Chair, I'm not really in much of a position to give a fair answer on that, being responsible for appointments. I know the committee has heard from my colleagues at ISED and the NRC and from the minister as well, and I think every effort is being made to try to address the issues that the committee has raised in terms of ensuring careful oversight.

I know that the current chair, Paul Boothe, was here, and he made a commitment to the committee to make sure to do that as quickly as possible and that he would review the funding that is in the pipeline and the funding that's been provided.

I think all efforts are being made across the system to try to craft that careful balance, but unfortunately, I'm not able to comment further, Mr. Chair, as we are, like I said, responsible only for appointments.

[The Chair, Conservative, John Williamson]

Thank you very much.

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

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

Thank you, Mr. Chair.

My questions will be along the same lines. I was not able to get back to you earlier because my time was up.

In terms of transparency and governance, I understand that we want to have a governance system that is a little more typical for a Crown corporation. Now, that is not enough transparency in terms of dollars spent and projects. For example, a department has an obligation to disclose all of its expenditures to the public. Those expenditures are reflected in the public accounts and in the financial statements of each department. However, Crown corporations do not have the same obligations. I think it's important for people to understand that, which is why I say that the transparency of these kinds of funds is paramount to the success of programs like this.

Is there still a way for CIC to agree to have the same level of transparency as a department? I think that would be ideal. If not, in terms of the funds that, although suspended, are still at SDTC, is there a way for IRAP to agree to disclose the information and to have the same transparency standards as those of a department? Do you think that's possible?

[Donnalyn McClymont]

Mr. Chair, I would just reiterate that I'll try to do my best to be helpful as a senior public servant to try to navigate some of the questions, but I am the appointments person.

All I can really say in response to transparency is that we will do our best, when we're hiring a new board, to make sure that they understand their responsibilities and the heightened attention, if you will, in terms of executing on the delivery of these funds. Beyond that, I'm not able to offer much about what could be done in terms of transparency for the organization going forward.

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

Thank you.

I want to go back to appointments.

When the steering committee is appointed, will you ensure that its members understand the importance, for the public and for taxpayers, of the required levels of transparency within CIC?

Can you assure us that you will make that very clear in your appointments?

[Donnalyn McClymont]

Mr. Chair, my understanding is that the CIC will probably be up and running in 2026.

Absolutely, I'm quite comfortable saying that when we appoint new board members to a new organization, we certainly assess their ability to manage complex funding models. I think the member can be assured that we will have a robust process to assess the new directors' ability to manage in this complex environment they'll be taking on.

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

Mr. Chair, I think my time is up.

[The Chair, Conservative, John Williamson]

It is, Ms. Sinclair‑Desgagné.

Thank you.

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.

I want to turn my questioning again to the appointment process and ways I believe the appointment process could have been enhanced to avoid what was a very serious issue of conflict of interest, or at least ways to recommend we make it better.

In testimony during some of this work prior to today's meeting, Ms. Verschuren actually mentioned that the reason she didn't recuse herself was that she had a legal opinion not to recuse herself in relation to over 100 companies receiving similar funding, including the Verschuren Centre, which is one of the more severe instances of the conflict of interest. She was unaware at that time of the rules to follow, the proper process for a recusal and the potential for a conflict of interest.

I believe the perceived conflict of interest could have been identified earlier on, particularly in this process. It seems to me there was a gap between the person who was being appointed through the selection process.... You said there were five checks to determine whether or not there were existing conflicts.

At any time, did Ms. Verschuren ever mention the Verschuren Centre?

[Donnalyn McClymont]

Mr. Chair, I thank the honourable member for the question. It's quite a good question in the sense that....

We do make sure that people understand their obligations and that over the life of their appointment, they will respect those obligations.

I would say in this case, referring back to the Ethics Commissioner's report, it was disappointing, to be quite honest, that she received legal advice that was not consistent with the legislation. I've actually used this as an example recently with deputy colleagues. I've raised it on several occasions since the Ethics Commissioner's report came out to remind colleagues, their colleagues and portfolio agencies that, as I've said several times here, the interpreter and the adjudicator of the act is the commissioner, not outside legal counsel or even our own legal counsel.

I think many of us have an instinct to take the advice of lawyers directly, and this is a bit of a cautionary tale. I think the Ethics Commissioner said as much in his report.

You're bang on. It's very important that candidates and appointees understand that if they have questions or if they're not sure, they have to refer back to the commissioner himself, and they will have to adhere to the legislation.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

My question....

I'm sorry, Mr. Chair.

[The Chair, Conservative, John Williamson]

Thank you.

Up next is Mr. Brock. You have the floor for five minutes, please.

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

Thank you, Chair.

I'd like to thank the witnesses for their attendance today.

I'll largely be addressing my questions to you, Ms. McClymont. I want to continue on the thread from my colleague Mr. Cooper and where he left off, which was the process by which Ms. Verschuren was ultimately appointed as chair. I know you can say that hindsight is always 20/20, and that, reflecting on her finding of guilt under the Conflict of Interest Act times two, you can say, well, I guess we should have taken some lessons from that and perhaps reinforced the conflict of interest provisions within the hiring sphere.

I guess what troubles me, and I'm sure troubles Canadians, is that there were red flags all over the concept of even entertaining the thought of hiring Annette Verschuren, with much communication happening from the past president and CEO. Nothing really was done.

Ms. McClymont, I know you're relying upon advice, and you were basically saying you encouraged her to obtain information and advice from the Ethics Commissioner. Clearly she did, but the advice she received from the Ethics Commissioner she didn't follow. Not only did she not follow it; other directors did not follow it. Hence, we're in this boondoggle of $390 million of taxpayer funds being inappropriately handed out to companies that were legally not eligible and directors basically padding their pockets. This is leaving a really sour taste in the minds of Canadians as to what kinds of shenanigans are going on with Justin Trudeau and his government.

He told her point-blank that she not only had to declare a conflict; she also had to recuse herself. She didn't do that. On the basis of that, she was found guilty times two.

I want to go back to the process. You mentioned there were under 10 applicants who were applying for this position. I want an actual number. Don't rely upon this being a privacy issue, because clearly it is not. I'm not asking for names. I'm asking for a finite number. How many people applied for the position of chair at SDTC?

[Donnalyn McClymont]

Mr. Chair, as I mentioned, close to 100 individuals applied for the chair position back in 2018.

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

You told me less than 10.

[Donnalyn McClymont]

I was responding to Mr. Cooper's question about the number on the advice letter that went forward. That was less than 10.

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

I see. Well, let's go back. You said there were over 100 applications.

[Donnalyn McClymont]

Mr. Chair, I would clarify that there were close to 100 applications.

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

You vetted those 100 down to under 10. Is that correct?

[Donnalyn McClymont]

That's correct, Mr. Chair.

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

Okay. What was the number under 10?

[Donnalyn McClymont]

Mr. Chair, as I mentioned, out of respect for privacy, the personal information—