Public Accounts Committee on Oct. 2nd, 2024

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Okay, and if you're not respecting that, obviously the department has to step in and say, “You said you were going to spend x, y, z, on the particular mandate of the program or the funding agreement that we had signed, and you're not respecting that. Therefore, we will not repay you or not allow you to declare those particular expenses with our department.”

However, I want to move on from that. You said there are three board members. What's the mandate of the board, actually? I know you mentioned that you're currently, through a third party, looking at current contribution agreements with those companies that were funded, but what else do you have to do within the mandate of the new board?

[Cassie Doyle]

The minister gave us, the new board, a very defined mandate and an appointment of one year, which is unusual in its brevity. Our mandate is to implement the Auditor General's report, to restart funding that had been put on pause and, thirdly, to ensure an orderly transition of the organization into the National Research Council. That's our mandate.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Obviously, there are some concerns about conflicts of interest, and I want to dive into that. The new contribution agreement that you signed with ISED, how does it differ from the previous one with regard to conflict of interest? We talk about real, perceived or potential conflicts of interest. How are you as a board managing that?

[Cassie Doyle]

There has been a fair amount of work and a new conflict of interest code within SDTC. We as a board receive monthly reports of any declaration of conflict of interest. ISED, under the new contribution agreement, also receives regular reporting of any declaration of conflict of interest. There was the appointment of a new ethics adviser at SDTC and quite extensive training that was implemented, so there's a much more robust conflict of interest regime in place. That applies not only to staff but also to contractors, anyone doing work for the foundation.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Some of my colleagues asked about your appointment. In June 2024, there was a press release and three board members were appointed. You talked about a third party being involved in reviewing the contribution agreements that are currently in place. When was that RFP given to that third party, or when was the award to that new third party for review announced? I'm just trying to determine whether it's—

[Cassie Doyle]

It was one of the AG's recommendations. It took us about six weeks, I think, so it was sometime in late July that the independent consultants were retained.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Is there an end time particular to the fact that they need to complete all of the reviews that were listed in that particular RFP, or is this “get to the bottom of this and take as long as you want”?

[Cassie Doyle]

No, we do have.... Our end time, which we made a commitment in the action plan to implement, is that by the end of December 2024 we have all of that review complete.

[The Chair, Conservative, John Williamson]

Thank you very much, Ms. Doyle.

To begin our third round, Mr. Perkins, you have the floor for five minutes, please.

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

Thank you, Mr. Chair.

The SDTC created something called accelerators. Are those project reviews for companies that were accelerators still in place??

[Cassie Doyle]

Thanks for that question. No new applications will be considered under.... The accelerators came under a stream called the ecosystem funding stream, so one decision the board has taken is to cease funding of the accelerators that are under the ecosystem and to not accept any further applications.

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

I appreciate hearing that.

I'm going to go through a scenario to make sure you're eliminating this from the whole process, because former SDTC chair Annette Verschuren came to that stream seeking a total of $6.8 million for the Verschuren Centre, which was one of those accelerators and which she established at Cape Breton University.

That got to the investment committee, which your now-acting chief operating officer was involved in, and we have emails from him in his role as VP of investments, which reported that the conflict was even too much for that group to accept and it was rejected, but it was committed in an email that SDTC staff would help find the Verschuren Centre money elsewhere.

The result of that was that, on June 9, 2022, ACOA granted $2 million to the Verschuren Centre and ISED another $2.5 million. In September 2023, while ISED was investigating SDTC, their regional development agency, ACOA, gave yet another million dollars, and then on September 19, 2023, the industry department gave them another $3.1 million. That's a total of almost $9 million of taxpayer money that the whistle-blower said staff were involved in trying to find for that centre elsewhere.

They confirmed it was a common practice for staff to be tasked with finding other money for these sometimes rejected and sometimes accepted projects in other government departments.

Have you stopped the practice of staff being the government relations and slush fund managers of the Government of Canada for either rejected or accepted projects on that? It is not SDTC's role to act as the in-house application process for other government departments, is it?

[Cassie Doyle]

As I've mentioned, we have a very particular mandate, and that mandate is, as I said, to go through those three things. The ecosystem funding stream has been discontinued, so—

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

Have you curtailed the process of staff acting on behalf of companies who apply and trying to find money for them from other government departments?

You were a deputy minister in other government departments. Have you stopped that? That seems to me not to be the mandate that Parliament gave the foundation.

[Cassie Doyle]

I'm not familiar with any practice like that being undertaken.

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

That means it hasn't stopped, then.

I'll move to my next thing. The order of the House of Commons was that unredacted documents from that audit period be turned over to the law clerk of the House of Commons. SDTC, as I understand it, has not fully complied with that. In fact, it put in redacted documents. The Speaker ruled on a point of privilege against the House, which we're debating as we speak in the House.

Are you, as a board member, ensuring that you comply with the order of the House of Commons to provide unredacted documents to the law clerk?

[Cassie Doyle]

We had directed, and I'm quite certain it was implemented, that thousands and thousands of unredacted documents be provided to the law clerk. None of the documents that were provided by SDTC were redacted.

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

The full order, according to the law clerk, has not been complied with because not all of the documents have come yet.

[Cassie Doyle]

The documents that were—

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

That's from a letter from the law clerk to the Speaker.

[Cassie Doyle]

Our own obligations, I believe, have been fulfilled at SDTC. There were a number of other agencies that were involved. In fact, I think almost every part of government was covered by that request.

[The Chair, Conservative, John Williamson]

Thank you very much.

Up next is Mr. Erskine-Smith.

You have the floor for five minutes, please.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

Thanks very much.

Thanks, Ms. Doyle.

You've implemented 10 of the 12 recommendations. When do you foresee implementing all of the recommendations?

[Cassie Doyle]

The only one that is outstanding is this reassessment of eligibility, and our target to have that complete is the end of December 2024.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

Excellent.