Public Accounts Committee on Sept. 5th, 2024

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

An interim board has since been put in place to support the transition. Can you confirm to the committee that they are not in fact GIC appointees?

[Donnalyn McClymont]

Mr. Chair, they are Governor in Council appointees. The chair himself, Paul Boothe, who was here, is a retired former deputy minister in both provincial and federal governments. He has been and is currently a Governor in Council appointee. The other two appointees are Cassie Doyle, a former deputy minister of NRCan, and Marta Morgan, a former deputy minister of Global Affairs. Those three were appointed in June by the Governor in Council, having been approved by cabinet, and will serve as the interim board to support the transition.

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

Thank you.

This is my last line of questioning here. Have you in your professional capacity since reflected upon the process of making GIC appointments? In particular, can you share if perhaps there have been discussions at your office to change or at least update the process in light of what we've learned so far about SDTC?

[Donnalyn McClymont]

Mr. Chair, I would say that we're constantly trying to improve the process and look at ways that we can strengthen not just the conflict of interest elements but all aspects of the process to make sure that individuals are as forthcoming as possible and that we understand the nature of their approach in terms of the substance, as well as how they are as managers and how they will best support the government's objectives.

I would note that this past year we've actually added and strengthened our forms, if you will, where we have a number of additional questions on our declaration form. That's been instituted since January of this past year, and one of them specifically asks about conflicts of interest. Certainly, I wouldn't attribute it entirely to this, but it definitely will give us pause to think about other things we could be doing to emphasize for individuals, when they've applied, the importance of understanding not just at appointment but throughout the life of their appointment their obligations under the act.

[The Chair, Conservative, John Williamson]

Thank you very much. That is the time.

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

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

Thank you, Mr. Chair.

Since I didn't have time to ask all my questions the last time I had the floor, I'm going to take the opportunity to ask them now.

Madam, you seem to have a somewhat simplistic view of the role of the Privy Council when you say that you act only in the case of appointments. Until proven otherwise, the Privy Council also acts to give clear mandates and responsibilities, especially when it comes to a program transfer like this one.

Why not talk more clearly about the mandate that the CIC will have with regard to sustainable development, for example? The Privy Council should be able to guarantee that.

[Donnalyn McClymont]

Mr. Chair, I would reiterate that we will certainly do our part, when it comes time to appoint members to the Canada innovation corporation, to make sure that they have a clear understanding of their roles and responsibilities as directors and as the chair for the organization in terms of administering the funding related to the SDTC funding, if you will, the clean-tech funding.

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

Okay.

Will that mandate be made public?

So far, there is no mention of sustainable development in anything that has been made public. I think it's very important that taxpayers know where their money is going. As a result, the CIC should be given a much more specific mandate.

Can you guarantee that?

[Donnalyn McClymont]

I would reiterate, Mr. Chair, that the legislation has been passed by the House for the Canada innovation corporation and that certainly when it comes time to make—

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

The mandate has yet to be defined. We can vote for the creation of the CIC and we can pass a budget for it, but the fact remains that the mandate has yet to be defined. The launch is set for 2026. At the moment, the CIC's mandate is really not clear. It needs to be defined.

[Donnalyn McClymont]

Mr. Chair, I would reiterate that, as I understand it, legislation was passed by the House this past spring for the Canada innovation corporation and that a decision was taken that the SDTC funding, the clean-tech funding, would fit well within the mandate.

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

Was it the Department of Innovation, Science and Economic Development that made all these decisions without the advice of the Privy Council?

[Donnalyn McClymont]

Mr. Chair, as an entity—and not just my group in appointments but the entire Privy Council Office, our colleagues in operations and machinery of government—we would have absolutely provided advice on the structure and the nature of the Canada innovation corporation.

[The Chair, Conservative, John Williamson]

You have time for a very brief question, Ms. Sinclair‑Desgagné.

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

It is rather strange that you have not provided a lot of answers on the CIC's mandate, given that your office handles it. The committee invited the Privy Council to appear with the expectation that these questions would be answered. It's a shame.

[The Chair, Conservative, John Williamson]

Thank you.

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.

Thanks again, witnesses, for being present in our study in relation to SDTC today.

We have heard a lot of testimony in relation to the mechanisms that resulted in, largely, a very severe instance of continued conflict of interest by Ms. Verschuren and the ways in which that was allowed to continue. I think the Ethics Commissioner did a good job of pointing out the very large discrepancies between what he had witnessed, in terms of the lack of ability to maybe understand the rules and requirements under legislation, and, in fact, what had happened.

We heard today from our witnesses that these persons, when appointed, were well informed about the requirements under the act, about the necessary requirement for recusal and about the important piece of declaring conflict of interest prior to making decisions, but we're still left with a really large question as to why Ms. Verschuren did it.

From my perspective, it's largely either self-interest or ignorance. The claim today of ignorance was one I sought to investigate, and I got, I think, some more clarity as to how much information these applicants truly have in relationship to the work they're asked to do. However, the result was still this very terrible situation happening in which Ms. Verschuren was able to essentially not play by the rules and to get personal benefit. That shouldn't be allowed. That cannot be allowed as we continue.

How do we fix this? How does the process of appointment play a role in making certain this never happens again?

Ms. McClymont, that's a question I'd ask you to answer in terms of what you could do better, what the department could do better or what the Privy Council could do better to avoid these conflicts of interest after appointment.

I think your prior comments in relation to opportunities to further review their conflicts may be part of that process, and I would encourage that. I think the more ways we can encourage more check-ins on conflict reviews, the better in this case, because we're dealing with hundreds of millions, if not billions, of dollars of taxpayer money. It requires the most severe level of oversight, and it requires, I think, a more proper investigation and review and a continued review of those persons after they're appointed, not just when they're appointed. You could almost call it a probationary period.

Would you comment on that, please, and on the need for real change in how we actually get these appointments done and when these appointments are reviewed?

[Donnalyn McClymont]

Thank you for the question, Mr. Chair.

I think the honourable member is bang on. It is important that people continue to understand their obligations over the course of their appointments.

As I've mentioned, we will continue to reflect on whether there is more we could do. As I said, we take a number of opportunities over the course of the selection and appointment process to make sure that people do understand their obligations. Clearly, in writing, we ask questions. Also, in some cases, as we had here, candidates are asked to speak to the commissioner pre-appointment.

I do feel that in this case the steps were followed. However, to the honourable member's point, it is important that people continue to live those requirements over the life of the appointment. That's something we can definitely try to work on, for those who are responsible, with, as I said, the Ethics Commissioner, the departments and ultimately the organizations.

I would say that in this case I do think the organization had robust processes in place, which they talked about when they appeared before you. It's just unfortunate, as the Ethics Commissioner pointed out, that they were not consistently followed.

[The Chair, Conservative, John Williamson]

Thank you very much. That is your time, Mr. Desjarlais.

We will turn back to Mr. Perkins for five minutes.

Go ahead, please.

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

Thank you, Mr. Chair.

Thank you, witnesses.

I understand that PCO is sort of a cog in the wheel of this whole machine of a massive number of government appointments to make things work, so I appreciate what you're saying. However, it's really important that we understand it. I appreciate what MP Desjarlais said about how this is what we want to avoid in the future.

Something that strikes me as a person who has served on both Crown and private boards is that the best way to avoid what has happened in SDTC's case is to not appoint people with conflicts of interest. That's the starting point. It doesn't guarantee that in the future they won't abuse it, but appointing people with conflicts of interest seems to be at the root of this problem, because their view, ethically speaking, of what their roles are and how to take advantage of the public purse seems to be different from the views of those who do not have them.

That's obviously a statement, but I'd like to explore this a little more. When Minister Bains appeared before committee, this is what he said, and I think it meshes with the process you've outlined:

After receiving applications for an appointment, a selection panel that included the Privy Council Office [and the PMO], with supports from across the government, was struck. These panels conducted interviews and presented ministers with a short list of candidates.

We've talked a little bit about that, about how many were on that list. He continued:

As part of the process, ministers would speak to the prospective applicants before formally recommending them for an appointment. Finally, the minister would make a recommendation and the GIC would pass it.

For those watching, GIC is the process that goes from the minister to the cabinet for the final approval of the Governor in Council.

He has that right. Is that correct?

[Donnalyn McClymont]

That's correct, Chair.

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

Ultimately, the minister, Minister Bains in this case, made a recommendation knowing fully well of the conflict of interest of the chair and recommended that the cabinet.... I'm assuming that was disclosed to cabinet. The cabinet approved the idea that we should appoint a chair with a conflict of interest. That's how Ms. Verschuren ended up in the job.

That's correct—right?

[Donnalyn McClymont]

I would say, yes, Mr. Chair, that is correct. I would add one caveat: It would be our responsibility at the Privy Council Office to ensure that anyone who goes forward for appointment has cleared all of the requirements for the position, which would be a check on our part to make sure that they align with the legislative framework and that they have cleared a background and security check before appointment.

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

This is why we're spending so much time on the process of the committee itself, trying to understand.

Not naming names, but did anyone on that committee suggest that we shouldn't appoint somebody with this kind of conflict of interest, who was doing business with the green slush fund?

[Donnalyn McClymont]

Mr. Chair, I don't have records of anyone making that degree of comment. I would say, though, that we do have in our records, which would have been provided to the law clerk as part of the motion, that conflicts of interest were identified from some candidates. It is a matter of public record from the Ethics Commissioner that the Privy Council Office would have advised Ms. Verschuren, given that she identified potential conflicts, to have a discussion with the Ethics Commissioner before her appointment could be considered. As the commissioner has noted, that was done with the office.