Public Accounts Committee on Oct. 21st, 2024

[The Chair, Conservative, John Williamson]

I call this meeting to order.

Good morning, everyone. Welcome to meeting number 145 of the House of Commons Standing Committee on Public Accounts.

Today's meeting is taking place in a hybrid format, pursuant to the Standing Orders. Members are attending in person in the room and remotely by using the Zoom application.

Before we begin, I'd like to ask all in-person participants to read the guidelines written on the updated cards on the table with respect to the sound system. These measures are in place to help prevent audio and feedback incidents and to help protect the health and safety of all participants, including and especially our interpreters.

I'll remind all those appearing in person and online that for the safety of our interpreters, it is very important that your microphones be muted when you're not speaking.

Thank you for your co‑operation.

I remind you that all comments should be addressed through the chair.

Pursuant to Standing Order 108(3)(g), the committee is resuming consideration of Report 6 of the Auditor General of Canada, entitled “Sustainable Development Technology Canada”, from 2024 reports 5 to 7.

Before I introduce our witnesses, I understand Mr. Erskine-Smith would like the floor for just a few minutes.

It's over to you.

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

Thanks, John.

As you will recall, at our last meeting things got quite heated between me and my Conservative colleague from South Shore—St. Margarets. I'll be brief, but I would like to speak to that.

I want to say that a former Conservative leader, in his last speech in the House as leader, raised concerns about performance politics fuelling polarization and about too many politicians chasing algorithms, clicks and “likes” towards diversion and division. I want to be clear: There's no place in the House or committee for personal and unwarranted attacks on a member's integrity, their work ethic or ability to exercise independence, which I would know, as I've exercised on countless occasions since I was elected in 2015. One shouldn't chase “likes” if it means embracing character assassination. It's toxic and unparliamentary, and it's going to push good people out of politics. We should call that behaviour out.

At the same time, I could and should have used parliamentary language in calling out that behaviour, because instead of contributing to a solution, I missed the mark. I retract those comments. We should all act how we want this place to be.

Thanks.

[The Chair, Conservative, John Williamson]

Thank you, Mr. Erskine-Smith. I do appreciate those comments.

I'll now turn to our witnesses.

From the Office of the Conflict of Interest and Ethics Commissioner, we have Mr. Konrad von Finckenstein, commissioner.

It's good to see you again, sir.

Also, we have Michael Aquilino, their legal counsel.

Mr. von Finckenstein, you'll be given five minutes for opening remarks. The floor is yours.

[Konrad von Finckenstein, Commissioner, Office of the Conflict of Interest and Ethics Commissioner]

Thank you.

Does the microphone work? I was told to do a test so that the interpreters can understand me. I gather that it works.

Thank you for inviting me to appear before you today. With me is Michael Aquilino, legal counsel at the office.

The subject of today's meeting is the Auditor General's Report 6, entitled “Sustainable Development Technology Canada”. It is about a performance audit conducted under the Auditor General Act.

We administer the Conflict of Interest Act and the Conflict of Interest Code for Members of the House of Commons. The commissioner's office helps members in the public office—

[The Chair, Conservative, John Williamson]

Mr. von Finckenstein, just one second. Some members are having some trouble with the interpretation.

Ms. Yip, can you hear me?

[Jean Yip, Liberal, Scarborough—Agincourt, ON]

Yes.

[The Chair, Conservative, John Williamson]

Is it working?

[Jean Yip, Liberal, Scarborough—Agincourt, ON]

Okay. I can hear now. Thanks.

[The Chair, Conservative, John Williamson]

Mr. von Finckenstein, you have the floor. You're welcome to back up and start over.

[Konrad von Finckenstein]

On a previous occasion, you gave me an extra-long microphone so that this doesn't happen. Maybe we can dig out that extra-long microphone.

[The Chair, Conservative, John Williamson]

The floor is yours, sir.

[Konrad von Finckenstein]

We administer the Conflict of Interest Act and the Conflict of Interest Code for Members of the House of Commons. The commissioner's office helps members and public office holders—i.e., people appointed to their positions by the Governor in Council—to prevent and manage conflicts of interest. On occasion, when necessary, we also investigate.

Michael Barrett, Member of Parliament for Leeds—Grenville—Thousand Islands and Rideau Lakes, asked me to investigate two members of SDTC's board of directors. One was Annette Verschuren, former chairperson of SDTC. The other was Guy Ouimet, a former director of SDTC. The SDTC board had 15 members. Of those, Ms. Verschuren and Mr. Ouimet were among seven directors who were appointed by the Governor in Council.

As order in council appointments, they were subject to the act as public office holders. Unlike reporting public office holders, this category of people subject to the act do not have to give the commissioner's office any personal and financial information on appointment, nor do they have to make any declarations. We do not assign advisers to them, but we are available should they have problems and want to contact us.

The other eight members of the board were appointed by SDTC's member council, so they were not covered by this act.

I reported on the Verschuren and Ouimet investigations in July 2024.

I found that Ms. Verschuren failed to comply with the act's provisions on decision-making and recusal. Those lapses were based on a misunderstanding of the difference between abstaining and recusing, and on incorrect legal advice.

It was clear there was an information gap about recusals. The office has therefore since addressed this gap by issuing an information notice, which can be found on our website.

In short, recusal is more than staying silent during a discussion or refraining from voting. Public office holders must leave the room, virtually or physically, so that their mere presence cannot influence other parties.

Unlike the Auditor General, the Commissioner's office does not look at any conduct other than conflicts of interest. In the case of SDTC, our scope is limited to the rules of the Conflict of Interest Act insofar as they apply to individuals appointed to their position by the Governor in Council.

I therefore have absolutely no comment to make on the alleged conflict of interest of individuals not appointed by the Governor in Council or on any other issues of alleged malfeasance mentioned by the Auditor General. That's not part of my remit.

I'm happy to answer your questions.

[The Chair, Conservative, John Williamson]

Thank you very much.

We'll open things up with Mr. Cooper.

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

[Michael Cooper, Conservative, St. Albert—Edmonton, AB]

Thank you very much, Mr. Chair, and thank you to the witnesses.

Mr. von Finckenstein, the report in which you found Ms. Verschuren guilty of breaking the law by violating the Conflict of Interest Act merely scratches the surface of corruption and conflict in the green slush fund. The Auditor General identified 186 conflicts of interest involving board members, involving 330 million taxpayer dollars.

When you appeared at the industry committee last month, you were asked by Mr. Perkins if you were going to initiate investigations into these many other conflicts of interest. You indicated that you had not. You further said, as a rationale, “When they are no longer in office, what good does it serve to expose them?”

You just said, in concluding your remarks, that this is not part of your mandate, so why are you not taking steps to look into these other 186 conflicts of interest, which did involve, potentially, board members who were appointed by way of order in council?

[Konrad von Finckenstein]

First of all, none of the order in council appointees are there any longer, but were in place at the time I made my final report. Second, as you know, my remit is basically conflict of interest. All I can do is expose it. I cannot penalize people. I cannot ask for repayment of funds or anything like that.

The allegations in the Auditor General's report are indeed shocking and very numerous, but they really do not concern what I am charged with, which is to expose conflicts of interest.

[Michael Cooper, Conservative, St. Albert—Edmonton, AB]

Mr. von Finckenstein, I appreciate that, and you are right that your mandate is to expose conflicts of interest.

When you were pressed by Mr. Perkins at the industry committee, you said that just because someone was a former board member or a former order in council appointee doesn't preclude you from initiating an investigation. Is that correct?

[Konrad von Finckenstein]

That's correct.

[Michael Cooper, Conservative, St. Albert—Edmonton, AB]

While it is true that these are now former board members, when you talk about “exposing”, I would submit that it's all the more reason why it would be appropriate for you to make queries about these 186 conflicts of interest, which you just said were shocking, that were revealed in Auditor General's report.

To that end, what about accountability? What about transparency? What about shining a light on wrongdoing on the part of former board members? Again, it's $330 million in taxpayer dollars.

[Konrad von Finckenstein]

I think the Auditor General has done exactly what you're asking for. She has exposed the workings. She has exposed conflicts. She has exposed where they were self-serving or log-rolling, etc. It is quite a damning report.

However, if I now exercise my discretion, which it is, to launch an investigation against one of these people, for instance—

[Michael Cooper, Conservative, St. Albert—Edmonton, AB]

Yes. Well, sir—

[Konrad von Finckenstein]

—what could I do? I would—

[Michael Cooper, Conservative, St. Albert—Edmonton, AB]

Sir, I'll ask you this. Have you contacted the Auditor General to inquire into the particulars of the 186 conflicts of interest involving the former green slush fund board members identified in her report?

[Konrad von Finckenstein]

Look, the Auditor General has a job. With what she does, she has access to all sorts of confidential information, which she guards, but then on that basis, she makes her report—

[Michael Cooper, Conservative, St. Albert—Edmonton, AB]

Sure. Again, my time is limited.

I'm asking you if you've made any inquiries of the Auditor General to better understand the particulars of those conflicts, because they're not in any way.... They're discussed in the Auditor General's report in broad terms, but not every conflict of interest is equal. Some may be more egregious than others.

Where there was impropriety, it seems to me that there would be an expectation that there would be accountability, including calling out those who violated the Conflict of Interest Act, potentially blatantly. This is because there were 90 instances identified in the report of board members not recusing themselves, notwithstanding potentially having interests in companies into which money was funnelled.

Again, have you contacted the Auditor General?

[Konrad von Finckenstein]

If you were a member of SDTC, your reputation by now would be damaged. You were clearly part of this whole organization and the behaviour that was exposed by the Auditor General. My report—