Public Accounts Committee on Sept. 18th, 2024

[The Chair, Conservative, John Williamson]

Welcome to meeting number 139 of the House of Commons Standing Committee on Public Accounts.

Today's meeting is taking place in a hybrid format, pursuant to the Standing Orders. I believe all members are in the room, although some might join us remotely, using the Zoom application.

Before we begin, I ask members to look at the guidelines written on the updated cards on your table. They are there to help prevent audio feedback incidents and to protect the health and safety of all participants, including and especially the interpreters.

I'll remind you that all comments should be addressed through the chair.

Pursuant to Standing Order 108(3)(g), the committee resumed consideration of Report 6, “Sustainable Development Technology Canada”, of the 2024 Reports 5 to 7 of the Auditor General of Canada, referred to the committee on Tuesday, June 4, 2024.

I would now like to welcome our witness. As a reminder, this committee adopted a subcommittee report at our last meeting, and members have agreed to refer to this witness as Witness 1. I ask that you comply with this decision of the committee.

Without further ado, I will turn to Witness 1 for an opening statement.

The floor is now yours.

[Witness 1, As an Individual]

Thank you, Mr. Chair, for the opportunity to speak before this committee as part of your study on the Auditor General's report on SDTC.

The release of the Auditor General's report in June concluded a two-year effort that I had initiated to expose how SDTC's idealistic mission was co-opted by a group of corrupt executives, board members and insiders within the clean-tech ecosystem. All or some....

You know, there's a lot of speech here. Frankly, I'm embarrassed to be here, because my being here is an indication that the systems that are set out to protect people don't work. That's the biggest issue here. I'll continue with my speech, but I want to make it clear that I'm here not just for SDTC. I want to point out that it should not have taken a two-year effort to get to this point. Even to this day, real accountability doesn't exist.

The Auditor General's findings conclusively validated and vindicated every single one of the issues that I had initially raised. Within hours of the report's publication, the minister dissolved SDTC—a clear indication of the severity of the misconduct. This decision should serve as further proof that SDTC was beyond repair, with corruption that was so badly ingrained it rendered the organization unfixable. It also serves as the ultimate indictment against SDTC's leadership, who continue to work today.

I'd like to extend my gratitude to the Office of the Auditor General for their dedication to this inquiry and their wider efforts as one of the few independent institutions in Canada that continue to uphold public trust in a system that has become increasingly opaque and unjust. Just as I was always confident that the Auditor General would confirm the financial mismanagement at SDTC, I remain equally confident that the RCMP will substantiate the criminal activities that occurred within the organization.

Again, I accepted this invitation to come to this committee because I'd like to talk about the actual effort that was required to get to this point and what the continued lack of action by the federal government indicates about our society. The real issues extend beyond SDTC's collapse. The true failure of the situation stands at the feet of our current government, whose decision to protect wrongdoers and cover up their findings over the last 12 months is a serious indictment of how our democratic systems and institutions are being corrupted by political interference. It should never have taken two years for the issues to reach this point. What should have been a straightforward process turned into a bureaucratic nightmare that allowed SDTC to continue wasting millions of dollars and abusing countless employees over the last year.

The first government official I approached was the Liberal member of Parliament for Calgary Skyview, George Chahal, at an SDTC event all the way back in May 2022. He assured me that he took this situation seriously and guaranteed that he would facilitate contact with the appropriate people in the federal government and the Auditor General's office. His subsequent refusal to engage forced us to spend the next five months trying and failing to contact various agencies, including ISED, the Ethics Commissioner and the public integrity commissioner, to name just a few. It was only in December 2022 that I finally contacted the Auditor General's office, which set off a chain of events that finally culminated in the report in June.

It took almost a full year after we initially talked to the MP until this file eventually ended up at ISED, which then hired RCGT in March 2023 to conduct a fact-finding exercise. This fact-finding was supposed to be a six-week exercise with a simple goal—to validate the documentation I had provided, with a stated guarantee that subsequent investigations involving the AG, ISED and the RCMP would be initiated if any of those documents and allegations were proven true.

By May 2023, ISED had already confirmed most of those allegations. RCGT had even drafted a report and provided a debrief to me, with ISED bureaucrats stating their plan to make a recommendation to the minister and PCO that the report be released and that at least four separate investigations be initiated and managed through a newly created office within ISED.

All of this should have led to immediate action, but once those findings reached the Privy Council Office and the minister's office, everything changed. The investigation was delayed for another four months, allowing SDTC to continue misusing funds and mistreating employees, when at this point the federal government had in fact known this was true.

By late August, ISED confirmed that no further investigations were required; instead, there were plans to release the report, suspend SDTC and remove the board and executive team immediately. This was the outcome I was expecting, and I was satisfied that this situation was finally going to be resolved, yet the minister and the government didn't act. ISED manipulated the findings and withheld the report from the public, and only suspended SDTC on a temporary basis with no plans to act against any single one of the wrongdoers despite having overwhelming evidence to the contrary.

The minister himself defended his inaction, stating that RCGT's report was inconclusive, but if anyone read the legal disclaimers RCGT had written in the reports, they actually stated the contrary. The report explicitly stated that none of the findings and work done by RCGT could actually be used to prove or disprove misconduct. This delay and lack of action again let SDTC continue operations unchecked and allowed them to continue to misuse taxpayer dollars.

At this point, the AG's office informed me of its decision to act, and in response, I made the decision to blow the whistle a second time, this time publicly releasing recordings that exposed ISED's deliberate inaction and falsehoods. The fact that I had to act again speaks volumes about the depth of corruption, not just within SDTC but within the government and bureaucracy. The government's failure to act promptly or transparently is not just a bureaucratic failure; it is a moral one.

These revelations triggered further inquiries in—

[The Chair, Conservative, John Williamson]

Excuse me, but I'm going to have to stop you there, because I think we're at a good point. You're a little over your time, and I'm sure the members are going to have additional questions for you.

Without further ado, I'll turn to Mr. Perkins for six minutes, please.

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

Thank you, Mr. Chair.

Thank you to the witness. If it wasn't for your ethics, bravery and, frankly, tenacity in exposing this over the last two years, we wouldn't be sitting here today, and we wouldn't have had the previous meetings we had. On behalf of everyone and all taxpayers, I thank you for the service you've done and continue to do.

One of the areas I'd like to explore is around former chair Annette Verschuren and her desire to get money from SDTC to the Verschuren Centre at Cape Breton University. I believe an email was written to Jennifer Smith from the then VP of investments, Ziyad Rahme, who is now the acting president. He emailed her and said, “Jen, this project is approved for fast track to the VCS”, that committee, the analysis committee.

Why would something be fast-tracked, and how would that happen?

[Witness 1]

In usual cases, we would fast-track applications that we could clearly see met all the requirements for SDTC.

I appreciate that you pointed this out, because we've had a lot of board members and executives speak to these issues as simple mistakes. Everything was just “We forgot to recuse ourselves”, and that was it. However, examples like that prove the intent, because one of the clearest ways to actually show what was happening is the potential of how they were brought into the organization and the preferential treatment that was given to these projects.

For the Verschuren Centre's application, there is no logical way anyone in the public could believe this wasn't preferential treatment, because for the ecosystem stream of funding, that wasn't publicly known to anyone. The public, who should have the ability to apply to something like the ecosystem fund, couldn't apply to it, yet she was getting fast-tracked.

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

I appreciate that. I have limited time.

On January 18, the same vice-president sent a note to someone named Beth saying it was rejected because of conflicts and saying, “We will help find funding from other avenues in government for that project.”

Did SDTC staff help Annette Verschuren find funding for this project and other projects from the government? As an example, $50 million went to Annette Verschuren's NRStor from Natural Resources and $170 million from the Infrastructure Bank. On top of that, the Verschuren Centre got a total of about $6.6 million anyway from ACOA, ISED and other programs.

Were SDTC staff involved in helping her get government money from other departments?

[Witness 1]

They were, and that's something that SDTC employees aren't supposed to be doing.

If an application gets rejected, you reject it and you point them to other organizations, but SDTC employees are not expected to go out of their way and spend their own time to actually help an organization get funding. That was completely out of the realms of their regular day-to-day business. It happened multiple times, not just with the Verschuren Centre.

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

On June 9, 2022, ACOA gave the Verschuren Centre $2 million. ACOA gave them another $4.2 million a little later. Then ISED gave the centre $1 million—another $1 million—bringing that to about $5.2 million. Then the Verschuren Centre got another $3.1 million from the ISED department.

It looks like the Verschuren Centre got over $10 million itself, and then another $220 million for her other projects from government departments. Was she using ISED or SDTC, the green slush fund, staff to help get her projects money from the government?

[Witness 1]

Not for all of them. Again, this is just that one situation where, after she was rejected, SDTC employees were asked.

You've also missed a couple more million, because there's another entity called NGen, which ISED funds, which indirectly funded the Verschuren Centre.

One of the things I'd like to point out is that there were three or four different public announcements about the Verschuren Centre getting funding, and every single one of them announced the exact same project, even though that project and the outcomes of that project had already been completed and funded three times over by various federal agencies.

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

The Ethics Commissioner found her to have breached the Conflict of Interest Act twice, as he said in his report, but in committee this week, it turned out under questioning that he actually said it was 24 times, but he didn't have any of these projects in it. Clearly, Annette Verschuren's conflicts with SDTC were way more than 24, as were other directors like Guy Ouimet, Andrée-Lise Méthot, Stephen Kukucha, and the list goes on. In fact, the Auditor General identified nine directors in conflicts who had 186 conflicts out of 226 transactions.

Was that your experience? Did you know that over 80% of transactions were conflicted with board directors?

[Witness 1]

I never did the math, but there wasn't a single project review committee or board approval that didn't have at least one or two projects that were directly connected to board members. For the majority of the time, employees weren't actually told about these conflicts. This was all only known at the board level, and you would only find out after the fact. This is why I mentioned the additional help that was provided on these projects on the front end and the preferential treatment because, for the most part, none of this was known to us, but you can look back at it and say, “Oh, that's why they got preferential treatment relative to others.”

[The Chair, Conservative, John Williamson]

Thank you. That is the time.

Ms. Bradford, you have the floor for six minutes, please.

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

Thank you.

I want to thank the witness for appearing today. I'm sure it's pretty uncomfortable for you. I understand that you already have given testimony at another committee, so I appreciate that you've come to public accounts.

Can you outline the exact behaviours at fault at SDTC, both on the mismanagement of funds front and also behaviours inherent to the toxic workplace that are central to your claims?

[Witness 1]

As I mentioned, for the most part there's a very structured and legitimate process that exists at SDTC to approve new funding. There are multiple employees who are involved, and there are multiple levels of due diligence that have to be completed, which take, for the most part, almost six months to complete.

The examples I would mention are times when the project would come into SDTC and get selected for due diligence and a fast track, even though the company might have never applied in an official capacity. During the due diligence stages, on multiple occasions there were times when the external reviewers and the internal reviews that employees would do clearly pointed out that the project should not be funded, yet all of those decisions were overruled by executives and then forced into the board for final approval.

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

Can I ask for clarification?

You said they never applied, but they came “into”. How did they come “into” for consideration if they weren't applying? I'm confused.

[Witness 1]

A lot of times these projects would just suddenly show up and an executive would say, “Hey, we have this project that we think someone should look at.”

Again, there is a legitimate and official process, but some of these projects never followed that official capacity, and this is why I continue to mention the preferential treatment. It's one thing to say everything is done and someone missed a conflict of interest declaration, but for all of these—if not, the majority—it was always some extra case of there being preferential treatment. There is information that clearly shows that the project is ineligible under five or six different categories. For any of those situations, while at the same time they are continuing to push along a project that they shouldn't, they are rejecting other projects that have the same or better impacts on the environment, which they would then reject in place of these projects.

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

Okay.

Now, could you turn your attention to the behaviours inherent in the toxic workplace that are central to the claims that you brought forward?

[Witness 1]

I don't think that's the focus of this committee today, honestly—

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

I think it's up to us to decide what the focus of the committee is, and I'm asking the question respectfully, because you were definitely claiming that it was a toxic workplace. I would like to know what behaviours constituted that, in your opinion.

[Witness 1]

Well, for example, there were cases in which someone of LGBTQ background was abused by an executive employee.

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

Abused in what way? Verbally abused?

[Witness 1]

Yes, verbally abused and accosted for what they were.

In other situations.... For example, the CEO had two separate employees at the same time who were under her who were concurrently on stress leave. I don't think that's a normal situation for an organization with fewer than 50 people.

Every single HR executive who worked at SDTC over a two-year period went on stress leave and was subsequently fired.

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

Could you tell us for what period of time the two were on stress leave? There has been a lot of stress in the workplace, and during COVID, you know, people were short-staffed. When, approximately, was this period when there were two off on stress leave at the same time?

[Witness 1]

I would ask that of SDTC.

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

All right.

Now, what was the exact period of time that you were employed at SDTC? I think it's a span of about two years, but could you provide us with more specific dates for the start and end of your employment there?