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.
Conservative
Michael Cooper Conservative St. Albert—Edmonton, AB
I'll ask Mr. Ouimet if he would apologize to Canadians for the conduct of the board.
There were 186 conflicts of interest and $38.5 million in COVID relief payments that improperly went out the door, millions of which went into companies of board members. Would you apologize and admit that this should not have happened?
Corporate Director, As an Individual
No. I acknowledge the Auditor General's findings, but the hon. member's statements are false.
Conservative
The Chair Conservative John Williamson
That brings us now to Ms. Bradford.
You have the floor for five minutes, please.
Conservative
Michael Cooper Conservative St. Albert—Edmonton, AB
He should read the Auditor General's report, and he should read the Ethics Commissioner's report.
Conservative
The Chair Conservative John Williamson
Order, Mr. Cooper. We've moved on to Ms. Bradford.
You have the floor for five minutes, please.
Valerie Bradford Liberal Kitchener South—Hespeler, ON
Thank you, Mr. Chair.
Thank you to both of the witnesses for being with us today. I realize that you've been at our committee before, so I thank you for coming back to this one.
Mr. Kukucha, your opening statement was very detailed, and my shorthand isn't what it used to be. Would you mind providing a printed copy to the committee so that we have that for the record and can review it?
As an Individual
A printed copy was sent to the committee late last evening.
Liberal
As an Individual
If I may, there was an allegation that I changed my comments in testimony from the opening statement, and I just want to correct that for the record. I stated that the vast majority of funds that these companies received were provided prior to my joining the board. I do not accept Mr. Perkins' allegation that I changed my testimony.
Liberal
Valerie Bradford Liberal Kitchener South—Hespeler, ON
Okay, thank you for that clarification.
Were the McCarthy review findings shared with SDTC's board and its employees?
Liberal
Valerie Bradford Liberal Kitchener South—Hespeler, ON
That's right, okay.
Now, I think many of us around this table are having trouble understanding some of the board's conflicting practices during Ms. Verschuren's chairmanship. The AG has found that in 96 cases, where $260 million was approved for funding, board members appropriately disclosed their conflicts and recused themselves, but in 90 other cases, with $76 million in funding, members didn't recuse themselves properly in cases of conflicts.
I'm going to address this to each of our witnesses. Can you please explain the difference in perception between perceived conflicts and actual conflicts? We're wondering why there's this discrepancy in how the board members conducted themselves. Could you maybe explain the discrepancy in following the organization's policies and what you view as the difference between a perceived conflict versus an actual conflict of interest?
As an Individual
I can only speak for myself, in that an actual conflict would be where I have or I had a direct investment. A perceived conflict would be where I had a relationship within the company or some connection to it or we had reviewed the company previously. That is how I interpreted the difference between those two matters.
Liberal
Corporate Director, As an Individual
My answer is the same.
In my case, I had only one real conflict of interest relating to one company. All the other instances in my files have to do with perceived conflicts or declarations made out of an abundance of caution, as the Conflict of Interest and Ethics Commissioner acknowledged. These were indirect links or knowledge that could lead to a perceived conflict. That was the case for a number of directors.
Liberal
Valerie Bradford Liberal Kitchener South—Hespeler, ON
I'll continue with you.
Were you ever asked to resign from the board of a company that had previously received SDTC funding?
Liberal
Valerie Bradford Liberal Kitchener South—Hespeler, ON
How and to whom did you disclose any real or perceived conflicts during the GIC appointments process and once joining SDTC?
Corporate Director, As an Individual
I declared the conflict of interest to the Governor in Council in the initial documentation, the application forms and the various documents that have to be submitted. I even declared it in my application letter with the forms. I then discussed it with SDTC management when I was appointed to the board of directors.
Liberal
Valerie Bradford Liberal Kitchener South—Hespeler, ON
Okay.
I have the same questions for you, Mr. Kukucha.
Were you ever asked to resign from the board of a company that had previously received SDTC funding?
As an Individual
Yes. As I stated in my opening statement, there was a company called Rotoliptic, which I sat on the board of and was asked to resign from as part of the GIC process, and I immediately resigned.
Liberal
Valerie Bradford Liberal Kitchener South—Hespeler, ON
Okay, thank you.
How and to whom did you disclose any real or perceived conflicts? You just answered about the GIC appointments process, but what about once you joined the SDTC?
As an Individual
The process to disclose once we were on the board was that, prior to every meeting, we received a list from management, and we sent our responses back to them collectively and to the entire board as well.
Liberal
Valerie Bradford Liberal Kitchener South—Hespeler, ON
Okay.
Mr. Ouimet, last week we heard that due to funds to companies needing to be approved by the board, oftentimes there would be many bulk approval processes where the applications were not even reviewed unless a board member had a specific question around any of the applications. Can you tell us a bit more about this bulk approval process and how these tranches of funding were allocated in such a way?
Corporate Director, As an Individual
Mr. Chair, a few years ago, we introduced a type of funding called seed funding, which was about $100,000 per business. That's much less than the usual funding provided to start-ups. Management set up a specific process, which the board of directors approved. A jury had to approve each project on behalf of the project review committee. The jury was made up of people from across Canada, including management representatives, outside experts and, at times, a member of the board of directors. We approved 10, 15 or 20 projects at a time for $100,000 in seed funding. At the board meeting, all the projects were tabled and, knowing that due diligence had been done, the board approved the funding amount. This is common practice in other financial institutions, including federal ones.