Public Accounts Committee on Oct. 21st, 2024

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

I have a point of order, Mr. Chair.

[Konrad von Finckenstein]

I—

[The Chair, Conservative, John Williamson]

Just one second, Mr. von Finckenstein. I have a point of order from Mr. Drouin.

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

Yes. I'm having a hard time listening to who's up. I know it's the member's time and I respect that, but obviously we need to hear from the witnesses as well.

[The Chair, Conservative, John Williamson]

Very good, and yes, members should avoid speaking over themselves.

What I'm going to do, before returning to Mr. von Finckenstein, is ask Mr. Cooper.

You have about 15 seconds left. Do do you have a further follow-up?

All right. Mr. von Finckenstein, the floor is yours. That will lead us into our next member.

You have the floor, please.

[Konrad von Finckenstein]

At best, you can say that he voted to save the $1,200 that he had invested. That was at stake at the time he made his vote, and I found that it was so trivial that it didn't.... The principle of de minimis non curat praetor applied.

That was at issue for him at the time he took the vote. Subsequent events, as you point out, turned out to be positive. That could have been negative, etc. I have no idea. That was not the issue. The issue was what was at stake for him at the point in time when he took the vote, and that was $1,200.

[The Chair, Conservative, John Williamson]

Thank you very much.

Mr. Drouin, you have the floor for five minutes.

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

Mr. Chair, we've changed our minds since then, so Mr. Erskine-Smith will be going ahead.

[The Chair, Conservative, John Williamson]

Mr. Erskine-Smith, you have the floor for five minutes, please.

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

Thanks, John.

The last back-and-forth was instructive, because you have the Conflict of Interest Commissioner saying that this is de minimis. It was a $1,200 stake, a 1% stake in a company that was one of 63 companies that were being funded in a bundled package in the midst of COVID. As well, we have a Conservative member saying, “How dare you find this to be de minimis, this green slush fund?”

I want to pick up from that, because when I hear that language of “green slush fund”, it sounds like bribery or embezzlement. It sounds like fraud. It sounds like there is something criminal there.

There were 90 conflicts of interest identified by the Auditor General in which processes were not followed. In 96 cases, they were followed. In 90 cases, they weren't followed. That's damning on its own, as you've said; in almost half of the cases, the policies were not appropriately followed, and 63 of those cases were those two COVID votes.

You've done a proper report with respect to Ms. Verschuren. You found two ethics violations. You did a proper report for Mr. Ouimet. You found that there was an ethics violation that was so de minimis that it was not of sufficient concern.

For the Canadian public who have followed these proceedings in passing and have heard language like criminal accusations and about “green slush fund”, you've looked at this in detail. You have the expertise. Is there any reason to think that there was criminal conduct here?

[Konrad von Finckenstein]

No. If there had been any reason for me to believe that there was criminal conduct, I would have immediately stopped my investigation and referred the matter to the RCMP. I am obliged to do that by the act.

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

In all of your review of documents, your interviewing of witnesses, the Auditor General doing the work and then your pursuing this further, not a single piece of evidence, not a single bit of testimony has caused you to pause and say, “Maybe I should refer this matter to the RCMP”.

[Konrad von Finckenstein]

No, there was nothing.

I listened to the examination of both Ms. Verschuren and Mr. Ouimet in entirety, which I always do in order to get a feeling or an assessment of the veracity of what they're doing, the credibility of what they are saying. It was clear to me that this was a fund that was—let's be kind—sloppily organized and operated, but there was nothing illegal from the evidence that I was presented with such that I would have said, “Hey, I should stop right now and refer it to the RCMP.”

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

Let's look at the jurisdiction for which you're responsible, conflicts of interest.

The Auditor General identifies those 90 cases. I want to go into the details a little bit here, because you have 63 cases that have to do with two votes around bundled COVID payments.

It's relatively straightforward what happened here. You've articulated this, and just so I have this clear, a lawyer at Osler who was reporting counsel gave advice to the board to say that they had already declared these conflicts or they'd managed these conflicts, so they didn't have to redeclare them and they could vote as a bundled payment without further declaring conflicts on this matter.

That was bad advice, obviously. You've said it was incorrect legal advice. You are right and the Auditor General is right, but that's what happened. It was bad legal advice that they were following.

[Konrad von Finckenstein]

Yes. These votes came up. Nobody talked about conflict of interest. We examined both Ms. Verschuren and the legal counsel, and they said that it hadn't come up. I asked why wasn't it raised, etc., and the legal counsel said that on the basis of their general knowledge of corporate law, they didn't think it was necessary.

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

I want to get to the 25 cases. We have 63 cases of those 90 that were the bundled COVID payments. Two cases in which the individual should not have been involved relate to an external expert reviewer.

With respect to the board, you have 25 additional cases in which directors participated in discussions and voted to approve funding, according to the Auditor General, despite having previously declared a conflict. Half of those directors, according to the Auditor General, said that there was no further conflict or that they did in fact recuse themselves.

With respect to those 25 cases, should Canadians have any concern? You obviously found two ethics violations with Ms. Verschuren. Should Canadians have concern in those 25 cases that anything warrants further investigation?

[Konrad von Finckenstein]

If these 25 allegations of conflict of interest resulted in enrichment, in fraud or something like this, it obviously should be investigated and should be dealt with. Unfortunately, it's not my mandate. I have no powers to do that.

The Public Sector Integrity Commissioner and the RCMP are both looking at this. Unfortunately, Parliament has seen fit to have different sectors. I am conflict of interest.

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

I understand—

[Konrad von Finckenstein]

The commissioner is in public sector integrity, i.e., misuse of money and fraud. The RCMP is to deal with criminal violations. We don't overlap, and we respect each other's jurisdiction. We have to. If I see something that belongs there, I will notify them and stop my investigation.

[The Chair, Conservative, John Williamson]

Thank you.

That is the time, I'm afraid.

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

Thanks very much.

[The Chair, Conservative, John Williamson]

I want to thank you for your testimony today, gentlemen, and participating in relation to “Report 6: Sustainable Development Technology Canada”.

I'll now suspend for a few minutes while we switch panels and welcome our next witness.

[The Chair, Conservative, John Williamson]

I'll now bring the meeting back to order.

Welcome back.

We are still discussing 2024 Report 6, entitled “Sustainable Development Technology Canada”.

I'd now like to welcome our witness. From the House of Commons, we have Michel Bédard, Law Clerk and Parliamentary Counsel.

Monsieur Bédard, it's good to see you again. Thank you for coming in today.

You'll be given time for an opening statement. The floor is yours for five minutes, please.

[Michel Bédard, Law Clerk and Parliamentary Counsel, House of Commons]

Thank you, Mr. Chair and esteemed members of the committee.

Thank you for the invitation to appear before you today.

As the chair indicated, my name is Michel Bédard, Law Clerk and Parliamentary Counsel at the House of Commons.

I understand that, as part of its study on the Auditor General's Report on Sustainable Development Technology Canada, the committee has some questions in relation to the order for the production of documents adopted by the House on June 10, 2024.

As members know, the order requires that the government, SDTC and the Auditor General deposit documents regarding SDTC with me, as Law Clerk and Parliamentary Counsel. I am then to notify the Speaker as to whether the documents were provided as ordered. The Speaker must, in turn, inform the House accordingly.

To date, I have provided the Speaker with four reports. I provided them on July 17, August 21 and September 16, and I provided the fourth report just this morning. These reports were all tabled in the House of Commons and are publicly available as sessional papers.

I note that some government institutions informed me that they still have documents to submit. The Auditor General also indicated that she may have more documents to provide later.

As stated in my reports to the Speaker, some documents I received were redacted while others were withheld. The order of June 10 also requires that the documents I receive be provided to the RCMP. On that, my office provided documents to the RCMP on August 16, 2024.

My role under the order is limited to receiving the documents, notifying the Speaker and providing the documents to the RCMP. The order does not contemplate any assessment or analysis of the documents.

As members are aware, a question of privilege was raised in the House of Commons on September 16 regarding compliance with the order. On September 26, the Speaker ruled that the matter constituted a prima facie case of privilege. The House leader of the official opposition, Mr. Scheer, then moved that the matter be referred to the Standing Committee on Procedure and House Affairs. This motion is still being debated in the House of Commons.

This concludes my remarks.

I will be pleased to answer your questions to the extent I can under the order of June 10 and taking into consideration that the House is still currently debating this matter as a question of privilege on whether the Standing Committee on Procedure and House Affairs should be seized by the matter.

Thank you.

[The Chair, Conservative, John Williamson]

Thank you very much, Mr. Bédard.

We'll now begin questions. I'd like to get through two full rounds, so I'll notify members that we'll be here a few minutes late, but not much beyond that. This should take about 50 minutes.

Mr. Nater, you have the floor for six minutes, please.