Public Accounts Committee on Oct. 23rd, 2024

[The Chair, Conservative, John Williamson]

Mr. Drouin, I've stopped the clock. I'm just going to wait for Mr. Perkins, who is leaving.

Thank you, Mr. Perkins.

Mr. Drouin, you have the floor again for just over three minutes.

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

I don't like to talk behind the backs of members of Parliament who aren't here. However, with all due respect, I don't believe that this process will help us discover the truth. The opposition members know quite well that their reason for filibustering in the House of Commons with their matter of privilege is that Parliament must hand over documents to the RCMP. We heard this loud and clear from a number of members in the House and also from the RCMP commissioner, which poses a problem for me.

Witnesses, I want you to confirm one thing today. I won't identify the individual who said this. We heard that a person could suddenly be appointed to a board of directors without having applied for the position.

Before the government appoints a person to a board of directors, I imagine that the person must have applied for the position. Is that right?

[Donnalyn McClymont]

Mr. Chair, the member is right. In the current construct, this government has chosen to create an open, transparent and merit-based application process for all Governor in Council appointees, which means that we have a portal. Folks apply through that portal, through opportunities. They are assessed. Ministers are provided with advice on qualified candidates, and it's up to the minister to choose and put a recommended name forward for the position.

It is ultimately the prerogative of the Prime Minister and the minister in question in terms of whom they choose to appoint to the position. Other governments in the past have taken different approaches in terms of using processes, or not, of appointing candidates to positions.

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

Again, no one can be appointed randomly, even if a minister discussed a potential candidate. A minister or a member of Parliament—whatever the case may be—may say that a person would be a good candidate to sit on a public sector board of directors. However, this doesn't mean that the person will be appointed. In principle, a check must be conducted.

How does the Privy Council Office conduct checks?

[Donnalyn McClymont]

It is quite possible that a minister could make a recommendation directly to the Governor in Council, and it could be approved without a process. That is possible. It would be up to the government to decide if that's how they want to run their appointment system.

This government has chosen to do it on the basis of an open, merit-based process, so in the current construct, you have to go through an appointment process in order to be appointed, but that really is ultimately up to the Prime Minister in terms of how they want to structure the appointment system.

Currently, as I said, you apply through a portal. We have opportunities. You could go on our website right now and see those opportunities. You would apply. If you met the qualifications and you were screened in, you would get invited to an interview. We would interview you. A selection committee made up of the Privy Council Office, the Prime Minister's Office, the department in question and the minister's office would interview candidates, and recommended candidates would go forward for reference checks and would ultimately end up on an advice letter to a minister. If the minister—

[The Chair, Conservative, John Williamson]

I'm going to stop you there. You are a little over, but I'm sure we'll come back to this. I appreciate your explaining the system to us.

Thank you.

Ms. Sinclair‑Desgagné, you have the floor for six minutes.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

Thank you, Mr. Chair.

I'm relieved to hear that the appointments were based on merit. I wonder what would have happened if that hadn't been the case. It would have been quite something.

I have many questions, so I'll get right to the crux of the matter.

Is the Privy Council Office aware of the Raymond Chabot Grant Thornton report?

[Donnalyn McClymont]

Mr. Chair, we are absolutely aware of the report, yes.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

Have you been briefed on the report's preliminary findings, which were tabled in late May or early June 2023?

[Donnalyn McClymont]

Mr. Chair, to the member's question, yes, we were kept apprised.

I was kept apprised directly by the deputy minister of the report and the work being undertaken, which was led by ISED at the time. We were kept apprised in the context of the fact that there were Governor in Council appointees on the foundation. If there were fundamental questions of issues with their conduct, it would have been up to us to advise the Governor in Council on consequences or actions related to conduct.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

When we look at the timeline of resignations, we see that a number of them took place after the tabling of the Raymond Chabot Grant Thornton report, between September 27 and the tabling of the Auditor General's report.

You read the report's preliminary findings. How could all these departures have been resignations? What happened in the meantime? Have you had any discussions with the board members?

[Donnalyn McClymont]

Mr. Chair, I did not have any conversations with the board members personally. I'm well aware that they resigned from their positions, but I was not in contact with any of them over the course of their appointments.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

You're speaking on behalf of the Privy Council. You said that the Privy Council, in general, wasn't aware of any discussions that might have taken place between the Privy Council or Industry Canada and the 10 board members who resigned. This means that the board members allegedly resigned of their own accord, even though the Raymond Chabot Grant Thornton preliminary report contained fairly serious allegations.

[Donnalyn McClymont]

Mr. Chair, I'm not aware of any conversations that would have transpired. If I had had any conversations with my colleague, the deputy minister of ISED, at the time, they would have been to underscore the need to be cautious in conversations with any members in the organization, because they were appointed to “good behaviour” tenure. This means there was a very high bar to remove them from office. That is a standard comment that I would make to any of my colleagues engaging with “good behaviour” appointees. We need to be cautious in conversations we have with them.

That would have been the extent of it, if I had had any conversations. I don't recall, and I certainly don't have any notes to the effect of conversations along the lines of the member's inquiry.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

As you just said, the standards of conduct are quite high. Why did so much time pass between the release of the Raymond Chabot Grant Thornton preliminary report in late May 2023 and the board member resignations almost seven months later?

After the tabling of the preliminary report, enough time passed for these members to approve new projects and advance some of their interests. Why didn't the Privy Council step in sooner?

[Donnalyn McClymont]

Mr. Chair, I appreciate the question from the member.

My colleagues at ISED moved as quickly as I would consider to be humanly possible to advance the report from RCGT and to provide advice to the minister.

From our perspective, as I said, it is a very high bar to remove “good behaviour” appointees. It means that you have to prove cause, which is why we were watching the circumstances very closely; if there was a bar for cause, we would have pursued that, for sure. Unfortunately, the circumstances were such that the individuals resigned and the investigation unfolded as it did.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

It's quite astonishing that you said that you must prove cause. The Conflict of Interest and Ethics Commissioner quickly showed that Ms. Verschuren was guilty of major conflicts of interest. Many people knew that there were serious issues. The preliminary findings of the Raymond Chabot Grant Thornton report made this quite clear.

Are you saying that, not only did the Privy Council—which appoints these people—know about this, but that you let these people leave of their own accord seven, eight or even nine months later? That's quite serious. Instead of waiting so long, you could have opened an investigation or acted more quickly. It takes nine months to grow a baby in the womb. That's quite a long time. I've carried a baby. I'm familiar with this.

[Donnalyn McClymont]

Mr. Chair, I appreciate the member's question and the desire to see rapid action in this set of circumstances.

I would reiterate what was said when we appeared previously. We talked about the construct of this foundation and that they were “good behaviour” appointments. You have to prove cause; that's set out in the legislation, and that can be a very challenging thing to do. You need a lot of facts and evidence. Quite frankly, that was part of the reason why fact-finding was being undertaken, to make sure that we had all of the information.

To the member's question about additional investigations, our expectation was that we would get to the facts through the RCGT report and we would then take whatever action was necessary at that time. Ultimately, that's what our colleagues did. They put forward advice. We saw that there was a change in the structure and that the individuals who had been part of the board resigned.

I take the member's point, but I think that, at the end of the day, there was resolution, and quick resolution, as far as I'm concerned. I have seen reports take much longer than this. I think we all did our best to move as quickly as possible in the circumstances.

[The Chair, Conservative, John Williamson]

Thank you.

Mr. Boulerice, you now have the floor for six minutes.

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

Thank you, Mr. Chair.

Ms. Hamoui and Ms. McClymont, thank you for agreeing to address some key issues raised over the past weeks. These issues have caused a bit of political turmoil, so to speak. We're trying to shed light on the situation and understand it better.

Does the Privy Council Office conduct the required checks during the selection process, or does it rely on the good faith and word of the people who apply? There's a big difference between the two.

Ms. McClymont, when you appeared before the committee on September 5, my colleague, Mr. Desjarlais, asked how you dealt with the significant conflict of interest issues involved in the selection process.

You said the following:

It starts in the notice of opportunity. A very detailed paragraph sends candidates to the website of the commissioner. It goes through the obligations for candidates, if they wish to apply, of how they have to adhere to the act.

How do you ensure that the candidate has read and understood these definitions?

[Donnalyn McClymont]

Mr. Chair, it's an excellent question that the member raises.

As I said at my last appearance, it's posted on our website. It's very clear on our website. Our expectation is that individuals will pay close attention to that. I mentioned the last time that there are about five touchpoints, from the notice of opportunity all the way through to appointments, where we ensure that individuals are made aware of their obligations under the act, if they are to become a Governor in Council appointee.

To respond to the member's question, we are trying to beef this up and we are asking more probing questions throughout the course of the interactions with candidates to get to the heart of what the member is asking, to make sure not only that they've read it but that they understand it. Ultimately, we do that in the interview itself, where we have a conversation at the end. I can tell you I'm doing an interview process right now for a very senior-level position and I am asking the candidate several times, not just once.

I think that will be the lesson that we will take from this—to make sure that they don't just read it but understand it—and we will work with the Ethics Commissioner's office to that end.

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

It's good that your answers today align with the answers that you gave us last time. This means that I can dig a bit deeper.

When you were last here, you said something quite similar to what you're saying now. You told us the following.

“In the interview process, we ask the candidates point-blank if they have any real or perceived conflicts in relation to serving in the role.”

This brings me to another question. I want to know whether candidates have both read the definition and understood the difference between a conflict of interest and the appearance of conflict of interest. It's a bit of a grey area. There can be a number of interpretations.

How do you make sure that they understand the important nuance between “conflict of interest” and “appearance of conflict of interest”? The appearance of conflict of interest has often been an issue in previous governments, which I won't identify.

[Donnalyn McClymont]

That's an excellent question. The previous Conflict of Interest and Ethics Commissioner raised this as a challenge. The act talks about real conflicts, and perception is really for individuals to manage.

We don't try to lead candidates, but if candidates flag anything for us that we have concerns with, as was done in the case of Ms. Verschuren, we refer them to the commissioner's office, and we make sure they've had the opportunity to talk that through with the office.

To your point, if they give us examples, we do emphasize perceived conflicts, and not just actual conflicts. It is part of our constant improvement, and we will give more consideration to that. It's a very good point.

[The Chair, Conservative, John Williamson]

You have 90 minutes left.

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

Mr. Chair, did you say 90 minutes? That's a long time.