Public Accounts Committee on Nov. 4th, 2024

[Karen Hogan]

Well, I obviously was not pleased that they partially agreed with some of the recommendations, but as I previously stated, I believe they are implementing what I think is one of the most important ones, which is doing a comprehensive review of all of the organizations that received funding to make sure that they identify any ineligible recipients.

[The Chair, Conservative, John Williamson]

Thank you very much.

Beginning our fourth and final round, Mr. Brock, you have the floor for five minutes, please.

[Larry Brock, Conservative, Brantford—Brant, ON]

Thank you, Chair.

I didn't think I would have to use some of my five minutes to educate some Liberal members on your particular role as an Auditor General. You're not a criminal investigator. You've never been set up as a criminal investigator. Your ability to detect potential fraud, or other acts of criminality, in relation to what has transpired under the SDTC is not your mandate, just like the Ethics Commissioner. If it's blatant, if there's an abundance of evidence, as you have indicated, you can make that referral.

The fact of the matter remains, despite the best efforts of Mr. Erskine-Smith, that the RCMP have confirmed that there is an ongoing investigation. Whether or not they ask for a production order from your office remains to be seen, but the fact that they haven't doesn't necessarily mean that they won't. I think that's the message that needs to come through to Canadians watching this. It's an ongoing investigation.

They have also confirmed that they have received documents from the House of Commons in relation to the House order, but they have been heavily redacted, which is precisely why the government and the House of Commons have come to this gridlock. It's because of the government's failure to produce all unredacted documents to the House, which can then be used by the RCMP as they see fit. Whether they look at it or not, that's entirely up to them.

In relation to the potential criminality here, Madam Auditor General, I want to remind Canadians that we're talking about potential fraud and breach of trust. Fraud is defined in the Criminal Code under section 380 as follows:

Every one who, by deceit, falsehood or other fraudulent means, whether or not it is a false pretence...defrauds the public or any person...of any property, money or valuable security....

They are guilty of an indictable offence, depending on the value.

Redirecting taxpayer funds to the tune of almost $400 million outside of contribution agreements, outside of the law, is in its very nature a fraudulent act. Whether or not the Crown can produce and establish intent remains to be seen, but the police will investigate at a lower standard than the Crown prosecutor who prosecutes potential fraudulent actors in relation to this scam.

Let's not forget that the Assistant Deputy Minister McConnachie equated this to simply giving away free money. It was the equivalent of a sponsorship-type scandal. That is how massive this scam, this fraud, this crisis, this issue is that is now bogging down the government operations in the House. To ask you one final question, all of this could go away if the government simply complies with the order of the House and releases all the documents pursuant to that order.

Would you agree with that, Madam Auditor General?

[Karen Hogan]

As I've previously said, this dispute between the government and Parliament is one they need to answer for and resolve. I am complying, to the best of my abilities, with the order, but, ultimately, the information resides and is owned by the government.

[Larry Brock, Conservative, Brantford—Brant, ON]

Well, it's simple. This is hypothetical. If the government continues to refuse to release the documents, we will continue to have a deadlock. If the government complies with the order, we can get back to the business of doing government. It's a binary option and choice.

Would you agree with that? The government has the option to comply or not comply, right?

[Karen Hogan]

Again, it's up to the government to answer why it is redacting or treating the information the way it is.

[Larry Brock, Conservative, Brantford—Brant, ON]

Okay.

Now, to Mr. Rahme, have you been contacted by the RCMP?

[Ziyad Rahme]

I have not been contacted by the RCMP.

[Larry Brock, Conservative, Brantford—Brant, ON]

Has anyone at SDTC been contacted by the RCMP?

[Ziyad Rahme]

As far as I'm aware, no one at SDTC has been contacted by the RCMP.

[Larry Brock, Conservative, Brantford—Brant, ON]

Have the current board members been contacted by the RCMP?

[Ziyad Rahme]

As far as I'm aware, none of the current board members have been contacted by the RCMP.

[Larry Brock, Conservative, Brantford—Brant, ON]

Okay.

I think you've indicated this, Auditor General, but I want to confirm it again. You've had some conversations, as you've indicated, with the RCMP, but they have not directly asked for anything specific or asked for any further interviews with you. Is that accurate?

[Karen Hogan]

You are correct. We do speak to them on many files, but on this file, we have had regular conversations and we have not received a production order.

[The Chair, Conservative, John Williamson]

Thank you. I'm afraid that is the time, Mr. Brock.

We're turning now to Ms. Bradford.

You have the floor for five minutes, please.

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

Thank you, Mr. Chair.

Continuing along MP Brock's line of questions, I'd like to read from a letter from Commissioner Duheme to Michel Bédard, the Law Clerk and Parliamentary Counsel, dated July 25:

Subsequent to the Motion, the RCMP undertook a review and examination of the Office of the Auditor General of Canada...tabled report on SDTC, along with additional administrative reports by Innovation, Science and Economic Development Canada and publicly available information. The RCMP has concluded that the available reports do not identify any criminal offences or evidence of criminal wrongdoing at this time, whether in relation to any specific individual or organization.

He does go on to say:

There is significant risk that the Motion could be interpreted as a circumvention of normal investigative processes and Charter protections.

He concludes:

[I'd] like to emphasize as well that the RCMP is operationally independent and strictly adheres to the principle of police independence. In a free and democratic society, this ensures that the government cannot direct or influence the actions of law enforcement and that law enforcement decisions remain based on the information and evidence available to police.

Ms. Hogan, the RCMP can request documents and get warrants for the documents it's seeking if it feels that's appropriate. Why, in your view, is there a need for Parliament to be paralyzed until the government and the OAG release documentation? Is the RCMP not capable of doing the investigations without the need for political intrusion? Do you have any thoughts on this?

[Karen Hogan]

It would be, as I mentioned earlier, inappropriate for me to comment on the will of Parliament and the actions that it takes, but my interactions with the RCMP have always been very clear and forthcoming, and they know that we will comply swiftly if they send us a production order.

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

There have been multiple legal experts and even former legal counsel from the House of Commons who have raised alarms over the motion. In a recent op-ed for The Hill Times, Steven Chaplin, a former senior legal counsel in the office of the House law clerk from 2002 to 2017, deemed the House order unconstitutional.

He said that “MPs have the power to order documents when it's relevant to parliamentary work, or needed to carry out parliamentary duties”, but that “ordering documents to hand over to a third party, like the RCMP, is out of scope since the purpose would be to serve an RCMP investigation, and not a parliamentary proceeding.”

I'm wondering if you have any views on this, Ms. Hogan.

[Karen Hogan]

Again, this is the dispute that I referred to that the government needs to resolve. It is something between Parliament and the government. I respect the privilege of the House and its ability to compel the production of documents, but, as I say, this is not my information to hand over; it is the government's.

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

Do you feel that it sets a dangerous precedent in any way?

[Karen Hogan]

As I mentioned previously, I feel it would potentially impede my independence should I be the mechanism by which Parliament were to obtain government information that should come directly from the government.

I am concerned about the unintended consequences that it might have on public servants and our ongoing access to information in a timely way to complete our work.

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

In the extensive review and investigation that generated your report—the AG's report that is at the base of all this—did you find any evidence of criminal wrongdoing? Did you think there was anything that reached that level in anything that you went through?

[Karen Hogan]

As I responded in the previous round of questioning, there was nothing that I believed was a potential indication of criminal behaviour and, as such, I did not refer a matter to the RCMP.

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

Essentially, the wrongdoing indicated in this report was basically that one of the board of directors failed to declare or act on a conflict of interest because she didn't remove herself from discussions. Is that the crux of this whole situation?

[Karen Hogan]

In my view, there were significant lapses in governance at the foundation and in the stewardship of public funds. I believe that conflicts of interest were very poorly managed. There were many reasons that was the case, but the board overall failed to oversee compliance with its enabling act as well. It is really about a big failure in governance at the foundation.