Evidence of meeting #140 for Public Accounts in the 44th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was ouimet.
A video is available from Parliament.
Liberal
Francis Drouin Liberal Glengarry—Prescott—Russell, ON
What did the Conflict of Interest and Ethics Commissioner say about that? Did he say that it was big enough to make decisions at Lithion Recycling, or did he just say that you didn't have a big enough stake in Lithion Recycling?
Corporate Director, As an Individual
The Conflict of Interest and Ethics Commissioner said that these shares of the company fell below the de minimis non curat praetor threshold, which means that this is considered insufficient for it to influence my judgment.
On that basis, he rejected the allegations of conflict of interest.
Liberal
Francis Drouin Liberal Glengarry—Prescott—Russell, ON
With 1% of the shares of Lithion Recycling, are you called upon to comment on management decisions or grants that the company may decide to seek out? Do you take a position on those issues?
Corporate Director, As an Individual
With 1% of the shares, I'm a shareholder, but, as was said, I'm a member of the board of directors. So I am indeed involved in decisions, but I wasn't involved in SDTC's decisions on Lithion Recycling, since the funding decision for the company was made before my appointment.
Then, during my term on the board of directors, there was a change to the contract, in 2019, I believe. I recused myself when there was a change in the contract. I stepped out of the room. With respect to decisions related to COVID‑19 payments, I didn't leave the room given the legal opinion we're all familiar with. This one was reviewed by the Conflict of Interest and Ethics Commissioner, who concluded that there was no violation of the Conflict of Interest Act on my part.
Liberal
Francis Drouin Liberal Glengarry—Prescott—Russell, ON
Indeed, with respect to COVID‑19 payments, earlier there were allegations that, 14 months after the fact, the payments had nothing to do with COVID‑19, even though the pandemic lasted more than two years. What impact can that have on a business, even 14 months later? What were the sales and needs challenges? What was the environment like during that time?
Corporate Director, As an Individual
Let me clarify, Mr. Chair, that this payment did not take place 14 months after the pandemic. I think Mr. Cooper wanted to talk about a 14‑month lead. When you consider a venture capital business, the lead is the period during which the business can survive if it doesn't generate revenue, despite the expenses it must assume.
According to the comment made earlier, the average survival of portfolio companies was 14 months. I haven't checked it, but that's what was said. Other factors were considered since all companies were having trouble carrying out their projects. Sometimes the project was cancelled with the partners and so on. As a result, business expenses increased quickly, as did uncertainty and their financial challenges.
That was the justification of the board and management to add 5% to the contracts, which resulted in two payments of about $20 million each.
Liberal
Conservative
The Chair Conservative John Williamson
Thank you very much.
Ms. Sinclair‑Desgagné, you have the floor for two minutes.
Bloc
Nathalie Sinclair-Desgagné Bloc Terrebonne, QC
Mr. Ouimet, can you please briefly describe the financial health of Lithion Recycling just before, during and after the COVID‑19 pandemic?
Corporate Director, As an Individual
Mr. Chair, is it relevant to discuss the financial situation of a private company?
Bloc
Nathalie Sinclair-Desgagné Bloc Terrebonne, QC
Mr. Chair, do we need to suspend the meeting?
Mr. Chair, did you hear what happened?
Bloc
Nathalie Sinclair-Desgagné Bloc Terrebonne, QC
I was asking Mr. Ouimet to describe the financial health of a company that received public funds. Mr. Ouimet asked whether it was relevant.
I think it's up to you to say whether it's a relevant question or not.
Corporate Director, As an Individual
Lithion Recycling is a start-up. It doesn't have significant revenues and must make major investments before it can be successful. It's an integrated lithium-ion battery recycling technology. Investments are being made in two phases. One plant has already been built, and the next project is worth $1 billion. The company's financial health is therefore assessed periodically. Successive funding is needed to achieve the objective.
Corporate Director, As an Individual
That's how Sustainable Development Technology Canada initially funded it.
Bloc
Nathalie Sinclair-Desgagné Bloc Terrebonne, QC
My next question is about that.
Do you think the $400,000 was necessary for Lithion Recycling to survive? Was the company's financial health so fragile that it had to receive funding twice, in March 2020 and March 2021, for a total of $400,000?
Corporate Director, As an Individual
Mr. Chair, when the board of directors of Sustainable Development Technology Canada made the payments related to COVID‑19, it did not assess the companies individually. The members of the board of directors were not aware of the financial situation of each company. The approach that was put in place was for programs.
Bloc
Nathalie Sinclair-Desgagné Bloc Terrebonne, QC
Okay.
Do you think it was a good decision to do that and not look at the financial health of individual companies?