Public Accounts Committee on Sept. 23rd, 2024

I want to make it clear that the board did not examine the financial situation of individual companies, but the management of Sustainable Development Technology Canada received an allocation from the board. SDTC subsequently contacted each of the companies and verified the situation of each of them before authorizing payments, at the discretion of management.

1:45 p.m.

Conservative

The Chair Conservative John Williamson

Thank you very much.

Mr. Desjarlais, you have the floor for two minutes, please.

1:45 p.m.

NDP

Blake Desjarlais NDP Edmonton Griesbach, AB

Thank you very much, Mr. Chair.

Thank you again to the witnesses for being present.

I have asked every witness this question related to the audit as it's been relevant to the public accounts committee, and that's been on the issue of recovery of funds. Taxpayers are hard-working people. They show up to work every single day. They show up without any bonuses or extra paycheques and they pay their taxes. They do it really well. They're trying their best, especially right now, when things are extremely expensive. I have asked this question mainly because I find that there's oftentimes a misjudgment or misvaluing of taxpayers and how much they actually work and contribute to our society.

The Auditor General made this recommendation:

Sustainable Development Technology Canada should reassess projects approved during the audit period to ensure that they met the goal and objectives of the Sustainable Development Technology Fund and all its eligibility criteria.

It's incumbent upon members of Parliament to ask the very difficult question of recovery of funds. I believe, sternly, that the money from projects that were deemed ineligible should be recovered to ensure that the taxpayers get justice in relation to those funds, which were disbursed and approved by a board that allowed for funds under a very direct conflict of the legislation, which enables them to get that money back.

I agree with the Auditor General that we should reassess this, but I would go further and suggest that we need to recover some of these funds. Of course, the victims of this mismanagement at SDTC are taxpayers. They're Canadians. They're small and medium-sized businesses. It's also our environment. It's deeply troubling that this was allowed to continue for so long, particularly under Ms. Verschuren's chairmanship. It was devastating to the small and medium-sized businesses that are doing everything they could possibly do to create innovation, Canadian innovation, toward what is a very serious issue plaguing our society.

Simply put, do you agree that we should not just reassess the projects approved during the audit period that were deemed ineligible, but also begin a process of recovery for those funds?

Mr. Kukucha.

As an Individual

Honourable member, as I'm no longer a member of the board, I will leave that to the new board to decide.

As I stated in my opening statement, I think a lot of good work was done by this organization, and a lot of deserving companies received funds. I acknowledge your statement, obviously.

I have nothing further at this time.

Conservative

The Chair Conservative John Williamson

Mr. Ouimet, do you have an answer for us?

Corporate Director, As an Individual

The findings of the auditors general are recognized in terms of non-compliance. In my remarks, I indicated that all SDTC investments decided by the board of directors while I was there were based on development plans and investment frameworks approved annually by the board, the department and the minister responsible.

The problem is elsewhere, and the Auditor General has recognized that. Indeed, the legal framework has not been updated quickly enough by the government to reflect the operational frameworks approved by the government, so it's an administrative matter.

Let's take the example of an ecosystem. Why are there ecosystems all of a sudden? It was noted that there was an influx of applications in some provinces, such as British Columbia, Ontario and Quebec. In other provinces, the technology development ecosystem was so weak that we said to ourselves that nothing would happen and that those provinces wouldn't receive their fair and equitable share of repayment opportunities.

Conservative

The Chair Conservative John Williamson

Thank you.

Corporate Director, As an Individual

In this case, we were saying that we had to create an ecosystem that would bring water to the mill. That's one example.

Conservative

The Chair Conservative John Williamson

Thank you very much.

We just have two more members to hear from.

Mr. Perkins, you have the floor, and then it's Ms. Khalid, who will end this.

Mr. Perkins, go ahead, please.

Conservative

Rick Perkins Conservative South Shore—St. Margarets, NS

Thank you, Mr. Chair.

Mr. Kukucha, I want to go back to how I ended my last session, because something you said astounded me.

Just for folks watching, anyone who's following, this is a complicated issue, the green slush fund. Parliament appropriates money to be spent and transferred to the foundation, as it's called in the green technology space. Over the years, it's been about $22 billion, but the last batch was about $750 million. The fence posts, the guideposts, for the foundation's board in spending that are called contribution agreements with the industry department, and they say you can spend Parliament's money on this and only this. The Auditor General found that, in many instances, the board had gone outside of that, particularly in the COVID payments but also in other instances, for a total of about $58 million that was spent in the five years she looked at. They were outside of the contribution agreements. In other words, they were against the rules that Parliament approved the money for.

You mentioned, Mr. Kukucha, that in the orientation package, when you became a director, they did not give you the contribution agreements to review so that you could understand those guideposts. Is that correct?

As an Individual

Mr. Chair, to the best of my recollection, they did not provide that. I defer to Mr. Ouimet's testimony that this was legislation that had not been updated, and we were essentially working in a system where it was my understanding, which was provided verbal confirmation both by the CEO and from the ADM present, that we were working within the government's approval.

Conservative

Rick Perkins Conservative South Shore—St. Margarets, NS

The question then is—and you were both on the investment committee—how do you make these decisions without knowing the parameters? You said that the ADM was there. The Auditor General referred to the fact that the assistant deputy minister, a senior bureaucrat in the industry department, sat in every single board meeting, and we're to believe that the minister didn't know what was going on when he had an official there.

In the Auditor General's report, it says that the board interpreted the official not objecting as agreement that what the board was doing was correct. Did you feel that way?

As an Individual

On the investment committee, we were aware of the general parameters that we would be making investments around. There were environmental targets; there were GHG reductions, and there was the circular economy. There were a whole lot of criteria that we judged projects by and that the expert reviewers reviewed by. When projects came to the project review committee, we very much had a set of criteria that we reviewed them against, and we worked very hard to do so.

Conservative

Rick Perkins Conservative South Shore—St. Margarets, NS

You don't know whether those criteria were actually consistent with the industry department's contribution agreements, since you never saw them.

As an Individual

As stated, I don't recall receiving a copy of that in my orientation material, but that was a very long time ago, and a lot has happened since then, obviously.

Conservative

Rick Perkins Conservative South Shore—St. Margarets, NS

Mr. Ouimet was appointed long before you.

Mr. Ouimet, did you have access to the contribution agreements at any time from your orientation on the board?

Corporate Director, As an Individual

Absolutely, yes. I've read the contribution agreement; I'm fully aware of it. I've seen the evolution of the investment plans, as I said earlier.

For example, at the beginning of SDTC—

Conservative

Rick Perkins Conservative South Shore—St. Margarets, NS

That's my question. Thank you.

You saw them. In spite of that, you still approved money outside the contribution agreements, then, since you were aware of them.

Corporate Director, As an Individual

No, I approved investments in line with the current government-approved investment plans.

Conservative

Rick Perkins Conservative South Shore—St. Margarets, NS

You were on the board during the Auditor General's period, and $58 million was spent outside of that agreement.

Conservative

The Chair Conservative John Williamson

I'm sorry, but your time is up, Mr. Perkins.

Ms. Khalid, you have the floor, please, for four minutes.

Liberal

Iqra Khalid Liberal Mississauga—Erin Mills, ON

Thank you very much, Chair.

Thank you to the witnesses for being here today.

There is no way in which I condone the misappropriation or misuse of public funds at all, whether it is through SDTC or any other way.

I want to give a bit of history before I ask you my questions. Since its creation in 2001, SDTC has invested more than $1.71 billion in over 500 companies that have generated $3.1 billion in annual revenues, created 25,400 jobs, commercialized 224 new technologies and reduced greenhouse gas emissions by 25 megatonnes of carbon dioxide annually.

Do you think that the conduct that has occurred here has inhibited or somewhat taken away from the credibility of this program?

I'll ask Mr. Kukucha first, and then I'll go to Mr. Ouimet.

As an Individual

I can only speak for myself, in that I acted in good faith and we were working under guidelines and an understanding that we were making best efforts to help contribute to the clean-tech companies, helping drive the economy in Canada. It would be a shame if that were brought into question based on what's occurring here. Having said that, we accept the findings of the reports and turn the matter over to the new board and government to continue funding as they see fit.

Liberal

Iqra Khalid Liberal Mississauga—Erin Mills, ON

Thank you.

Mr. Ouimet.

Corporate Director, As an Individual