Public Accounts Committee on Nov. 4th, 2024

[Karen Hogan]

Most of the information in my file belongs to either ISED or the foundation. They are the holders and owners, so they should decide who gets that information. Parliament should receive all of that information from the government directly, not through me. They should provide that information to the law clerk.

We have had many conversations with ISED since June—a good dozen or so—about understanding what security they will apply to that information, because I am required to respect the confidentiality or security level they place on their information. You would have seen this in other situations, such as the vaccine audit. While we were able to see all of the vaccine contracts, we needed to respect the policies inside those contracts, and the terms and conditions. We also had to respect whatever security classification government departments might put on them.

It's the same situation. We went back to the department, asking them to help us understand what, if any, redactions they have applied, because I am not the owner of that information. They are.

[Valerie Bradford, Liberal, Kitchener South—Hespeler, ON]

That was going to be my question, because we've heard that the documents are being received with redactions.

Are those redactions coming from the department, or are you acting on their instructions? Who's redacting the documents?

[Karen Hogan]

The department needs to tell me the level of redaction or security they are placing on them so I can respect that same security privilege. I am bound to follow government security policy, which says that, because I do not own this information, I should follow what the owner of the information believes.

This is why I think Parliament should go directly to the government and not use us as a vehicle to get information it should be receiving from government.

[Valerie Bradford, Liberal, Kitchener South—Hespeler, ON]

What happens if your independence and that of other agents of Parliament is compromised?

[Karen Hogan]

Well, Parliament has given my office an incredibly broad level of access. With that access comes the responsibility to not abuse it. I am concerned that, if I hand over information that should be received from the government, it wouldn't be hard to then imagine ordering me to do an audit just so Parliament can receive information they can't normally get from government. That would really impede my independence.

Then, as I said, an unintended consequence could be that members of the public service may not be willing to provide free and unfettered access to information, which is something my office has enjoyed for many decades.

[Valerie Bradford, Liberal, Kitchener South—Hespeler, ON]

Now, the law clerk appeared at this committee on October 21 and made comments related to the House motion, notably on constitutional challenges that may arise as a result. You've relayed your concerns directly to the law clerk.

Can you elaborate on the concerns you relayed to the clerk?

[Karen Hogan]

I think my concerns stem again from this, that I should not be the vehicle through which Parliament receives information from the government. They should go directly to the government.

Fundamentally, when I look at the order, I believe it's to get information to the RCMP. As I have stated previously, we have a well-established mechanism with the RCMP. In fact, my office has communicated with them quite often over this.

I think Andrew has been having those conversations and can provide more information.

We have told them that we are ready to comply. If they would like to send us a production order, we would be happy to provide them with information. When doing so, it goes to the RCMP in an unredacted fashion, so it is the best way for the RCMP to have access to the information they need to do their job.

[The Chair, Conservative, John Williamson]

Thank you very much.

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

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

Thank you, Mr. Chair.

Madam Auditor General, thank you for being here today. Thank you to your team as well.

Let's go back to paragraph 44 of your report. You said:

The spouse of one of the foundation’s senior managers was a partner at the human resources recruiting firm that the foundation used to support its process to appoint directors…

Can you just confirm that when you're talking about one of the foundation's senior managers, you're talking about Mr. Rahme, who is here today?

[Karen Hogan]

Yes, it's the chief operating officer who is here now.

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

I have many questions for you. Can you describe to me, as briefly as possible, the role of Boyden, the company in which Mr. Rahme's wife is a partner, in appointing SDTC's board of directors—Sustainable Development and Technology Canada, that is—and the role of those Boyden appointees in relation to the executive staff at SDTC?

[Karen Hogan]

To help you understand the situation, I would refer you to exhibit 6.2 of the report, which illustrates the two processes for appointing members of the board of directors. They are selected by either the Governor in Council or a committee—

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

Did the Boyden-appointed board members have any say in executive and board members' compensation?

[Karen Hogan]

Once they're on the board, yes, they have to vote on executive compensation. However, I don't know how board members are paid.

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

I'm talking about executive bonuses.

[Karen Hogan]

I'm going to ask Mr. Lequain to provide you with a little more information.

[Mathieu Lequain, Principal, Office of the Auditor General]

The members are volunteers. That company provides the members with a list of potential candidates who could meet the requirements. The fact remains that the members decide who is appointed to the board of directors.

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

My question is very specific. Can the board of directors decide on executive compensation, yes or no?

[Mathieu Lequain]

Yes.

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

Very well. Thank you.

To summarize the situation, Mr. Rahme's wife was a partner in a firm that recommended the appointment of individuals as board members, and those board members could subsequently decide on executive compensation. There's a loop.

[Karen Hogan]

Yes, there is a loop, but I believe the witness stated earlier that his wife was not involved in the process.

I listened to his opening remarks. I don't know if his wife was part of the team that chose the board members, but she worked for the same company. Our concern is that SDTC's conflict of interest policy did not include provisions for conflicts of interest that are not directly related to funding. That was a shortcoming in their policy.

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

Absolutely.

I quoted from your report. You talked about the spouse of an executive who was with a company that was part of the loop. Indeed, there was nothing in their policy other than the financial aspect. We've already seen the 90 cases of conflicts of interest that you named, which were financial conflicts of interest. You noted this case, which is not financial in nature, although we can see that there is still something financial in the loop.

Thank you for those clarifications.

Mr. Rahme, can you confirm that your wife's name is Kathy Rahme and that she works at Boyden as a partner?

[Ziyad Rahme]

Yes, I can confirm that.

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

Thank you.

Has Boyden ever received money from SDTC—for consulting work, for instance?

[Ziyad Rahme]

If I understand the question correctly, you're asking me whether they were involved in board recruitment. Is that correct?