Public Accounts Committee on Sept. 18th, 2024

[Witness 1]

With regard to some of those payments, I think SDTC was always below the targeted spending that gave the executives their bonuses, so a lot of these approvals were made to offset what was still available to them under the contribution agreement.

Let's say you had a target to spend...because again, the incentive structures at SDTC were based on how much money you spent and how fast you sent it out, not how effectively you used it. In certain cases, when you didn't meet the target threshold that you needed to, you would provide some level of automated funding or something like these COVID payments to meet the amount you technically had available to give out.

[Jake Stewart, Conservative, Miramichi—Grand Lake, NB]

Yes, but $58 million was spent by the board outside of the contribution agreements. That, to me, seems like illegal behaviour by the board. I would assume that only Parliament could approve spending estimates. That's what I am curious about.

[Witness 1]

Potentially. I'm not a lawyer.

[Jake Stewart, Conservative, Miramichi—Grand Lake, NB]

I'm not either.

The minister claims the department became aware of mismanaged conflict at the start of 2023, but based on audio recordings, it's apparent that the minister could potentially have become aware as early as May 2022. In your assessment, how likely is it that the minister was more than aware well before early 2023?

[Witness 1]

I think it's unlikely. I honestly think George Chahal is just lying, but I would assume.... From some of the conversations I had within that ISED investigation, there were indications that other problems had previously been reported to ISED as pertains to SDTC or its executive or board, so there is the possibility that there was something that was potentially known to ISED prior to the situation, but maybe nothing specific to the situation we're talking about right now.

[Jake Stewart, Conservative, Miramichi—Grand Lake, NB]

Essentially, what you're saying, though, is that the ADM who was privy to all of it—I don't remember the individual's surname at this moment—would have had to brief the deputy minister, and it would be the deputy minister's responsibility to brief the minister. That's a lot of time going by. It seems very unlikely that the minister wasn't aware.

[Witness 1]

That's correct.

[Jake Stewart, Conservative, Miramichi—Grand Lake, NB]

Do you believe he was aware? Outside of George Chahal.... What do you believe? Do you believe the minister was aware that this was all going on?

[Witness 1]

I believe that during that whole time, which was March to October 2023, he was aware of the situation. He did not just become aware in March and then conveniently forget about the situation for eight months, because again, within the context of the conversation that occurred, something that was continuously explained to me was the fact that there was always this political pressure on the ADM and the deputy minister to give updates and to provide some sort of an end to this investigation. The only reason that would have happened was that there was an ongoing conversation back and forth about the situation.

[The Chair, Conservative, John Williamson]

Thank you very much. That is the time.

Mr. Weiler, you have the floor for five minutes. Go ahead, please.

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

Thank you, Chair.

I just want to pick up on the question that my colleague Ms. Yip asked earlier. As the transition is happening from SDTC to the NRC, what recommendations do you have with respect to the programming?

[Witness 1]

Do you mean recommendations as it pertains to the people there or recommendations as to the funding?

If they truly want to have any aspect of this survive to protect the companies that legitimately receive the funding, the government needs to do a better job providing public confidence that they're addressing the issues. My fears are that they're going to continue on the pathway they've been on and that they're going to continue to hide certain aspects of the situation. Once it moves over to NRC, there's a higher risk that something comes out, which would then permanently impact a federal department.

One of the reasons this transition is going to take a long time is that all of this wrongdoing and misconduct that's already been found is going to impact companies. I know there have been companies that have potentially gone bankrupt because of the situation. That is a huge legal liability that SDTC executives have created for the federal government.

As a taxpayer.... They should deal with that situation before it's brought into the federal government itself. The idea that they're bringing SDTC into NRC and then spinning it back out doesn't seem like a logical situation because that kind of seems abusive to employees. You are winding down an organization, setting it up on the inside and then spinning it back out over a three-year period. It kind of sounds like purgatory or something.

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

I appreciate your answer.

That leads into my next question. How can we ensure that, with this overhaul of the framework for SDTC, employees are best protected and that stricter policies and adherence to accountability and oversight are in place so that SDTC can carry out its mandate and, as you mentioned before, be able to serve a lot of really important companies in the clean-tech sector?

[Witness 1]

One of the things with this whole McCarthy Tétrault thing is that, as much as the committee member says that the report is legitimate, I think there's a lot of long-term anger among employees about how all of that turned out. With some of these implicated individuals below the executive level being moved into this organization, there's a lot of bad blood that's going to stay there. Again, there still hasn't been a reconciliation of the actual abuses that occurred. Therefore, until that happens, all that's going to happen is that the same people who were abusing on SDTC's side are now going to be at NRC, and now they have a bigger pool of employees to abuse or do bad things against.

Transparency seems to be an issue that can't be addressed by the current government. Again, I can give unlimited things that sound logical, but until the government proves that they're going to be transparent about what they're doing.... They haven't even given the RCGT report to the committee. They haven't even released it to the public. All of these things supposedly exonerate everyone and supposedly should give confidence. There's no proof of any confidence right now.

Again, we wouldn't be having this committee meeting if there was transparency to the situation.

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

You've made some pretty serious claims about the work of McCarthy. I'm just curious. Do you believe that they're trying to participate in a cover-up with the work that they're doing in this report?

[Witness 1]

Absolutely.

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

Okay. I have no further questions.

[The Chair, Conservative, John Williamson]

Thank you very much.

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

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

Thank you, Mr. Chair.

I have two quick questions for the witness.

Witness 1, you told us that, during the McCarthy Tétrault investigation, the list of employees who willingly participated in that investigation was disclosed to the executives at Sustainable Development Technology Canada. How was that list disclosed? How did you become aware of it? Do you have any evidence to that effect?

[Witness 1]

Yes. When I participated in it, it showed me that.... Again, what everyone was told was that this investigation was going to be confidential and that no one from the SDTC executive team would know about what was happening, but for everyone who participated, especially the ones who had NDAs, there was an online response that showed that it was the executives at SDTC who were approving the ability for employees to participate.

On top of that, when McCarthy was asking for certain records on the HR side, they were going to executives and SDTC HR to ask for those records. Again, there wasn't any sort of independence that would protect employees around the integrity of the investigation from day one.

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

It would be helpful to parliamentarians if you had any emails to that effect or any evidence to support what you're telling me. If you have anything like that, can you send it to the committee, please?

[Witness 1]

That is correct. I have my own emails.

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

Perfect.

Thank you.

[Witness 1]

There are multiple emails that show there were other employees, current and former, who asked these questions. They were ignored by McCarthy.

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

Okay.

Thank you very much.

I'd like to clarify what you said about the freeze on funding for businesses as of October of last year. Businesses have contacted me, including one in particular that was approved and received some of its funding. That company has received absolutely nothing since October of last year, which is contrary to what you're saying. You said that some companies may have been approved by the board of directors, but there's something I don't understand about the freeze on funding for companies that were pre-approved.