Public Accounts Committee on Nov. 18th, 2024

[Iqra Khalid, Liberal, Mississauga—Erin Mills, ON]

I have a point of order, Mr. Chair.

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

My time is limited and he's not answering the question.

[The Chair, Conservative, John Williamson]

Mr. Perkins, I've stopped the clock.

There is a point to order.

[Iqra Khalid, Liberal, Mississauga—Erin Mills, ON]

Chair, I'm not sure how we're expecting answers if we don't let the witness answer the question. I think Mr. Perkins is asking some great questions, but I would also really appreciate hearing the answers from the witness as well.

[The Chair, Conservative, John Williamson]

Thank you for that clarification.

Mr. Knubley, this is coming late and I apologize for that. The time is primarily owned by the members, but the way it works around the committee table is that, should you be cut off and you have a point to make, frequently, almost always, another member will allow time for you to finish your thoughts.

Mr. Perkins, you have just over a minute left. Can you wrap things up, please?

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

In 2016, one of her companies received $12 million. In 2017, another one received $2.5 million from the green slush fund and another one $2.2 million, and another one received almost $7 million.

This is a lot of money. I'm having trouble balancing your statement that you had an ADM there, that you believe it was the job of the ADM—and not every deputy minister believes in this—to tell you what was going on there, yet you sit here at the committee and tell me that your ADM told you nothing about the 82% of the time that these directors were in a conflict. It's just not believable.

[John Knubley]

What I can tell you is that the expectation that I had on these issues was that SDTC—its chair, its board and its executive—would manage its conflict of interest issues. They were fundamentally independent and that was their requirement.

In terms of Andrew Noseworthy, his responsibility to me was about performance, policy and alignment. That was our focus at the time, and I hope I've explained—

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

Does the department have no responsibility for a billion dollars of taxpayer money that he was sitting and watching these directors funnel to companies—$390 million—that they own? I've worked in government. I don't believe for a second that the deputy minister was so detached from what was going on. You had a direct report and you had asked him to tell you what was going on, yet the person never told you and you never told the minister. It's not believable.

[John Knubley]

Mr. Perkins, I respect your point of view, but I don't agree with it.

The one point of clarification I would make is that when I was deputy minister, the actual allocation to SDTC, which happened in 2007, was $400 million. It was only in 2021 when they received $700 million. The issues at play when I was there were, in fact, related to $400 million. I was not there, actually, for all the allocation of that money.

[The Chair, Conservative, John Williamson]

Thank you very much.

Mr. Drouin, you have the last question slot to round us out. It's over to you, please.

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

Thanks, Mr. Chair.

Mr. Knubley, I'm sure this is not the first time that you have appeared before a parliamentary committee. As you have rightly pointed out, you have been a public servant—

[John Knubley]

I hope it's my last.

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

Me too. I'm just kidding.

Obviously, you have served as a senior public servant under the red team and the blue team. You've served honourably under multiple governments. Your style of management, I assume, did not change while you were serving, whether it was for the Liberals or the Conservatives. Whoever was in power, your style of management has not changed in the last 40 years. Is that correct?

[John Knubley]

Thanks for asking that question.

I prided myself in my ability as a public servant to work with governments of whatever stripe and with all ministers of whatever personality and approach. I honestly felt I had good relationships with all the ministers I worked with, whether at Agriculture, Natural Resources Canada, the Atlantic Canada Opportunities Agency, Transport and Infrastructure or, as we've been talking about, Industry, whether it was Minister Paradis, Minister Bains or Minister Moore.

I really do want to tell the committee that it's the job of a public servant to be a loyal, neutral public servant who gives the best advice on the issues they're responsible for.

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

I think you have alluded to this before: SDTC was only one of 16 agencies under ISED. Is that correct?

[John Knubley]

Yes, and it's actually not as straightforward as it sounds, because there are independent agencies and then there are others. For example, I had the responsibility at the time for overseeing the regional agencies, partly because I had experience there.

The number is 16, but the number of agencies and activities is higher. It's probably more like 30.

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

You see that a lot of members are making reference to specific payments that are not necessarily related to the contribution agreement that you or the department had signed, but they are asking you questions on the day-to-day operations of SDTC.

How much time would you spend on the day-to-day operations of SDTC as deputy minister?

[John Knubley]

I'm not sure I should answer that. I mean, it was one of the smallest agencies. Again, I had the signal from these documents, the AG's 2017 report and the evaluation, that it had a clean bill of health. My focus was on BDC. My focus was on developing not just a clean technology sector but also the manufacturing sector and the tourism sector. At the time when I was leaving, there was quite a bit of activity on developing a strategy on tourism.

As we talked about before with Jim Balsillie, we were working very hard on launching a digital charter, a digital trust approach and an IP strategy. That was probably one of the highest priorities of the department as I was leaving.

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

Just how many people work at...? When you left, do you know what the budget was for Innovation, Science and Economic Development?

[John Knubley]

When I left, the budget was about $7 billion a year. That's for the portfolio and the department. There are 5,000 people in the department and 25,000 people in the portfolio. If SDTC is, say, 200 people, they are 200 of the 20,000 who are in agencies in the portfolio.

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

We're talking about a few million dollars. I don't want to degrade what the Auditor General has said, but the expectations that the deputy minister would be spending his day thinking about what happens on a day-to-day basis with a small arm's-length organization, understanding that you had somebody else looking at this.... Any reasonable person would say that it's absolutely normal that a deputy minister would not be involved in the day-to-day operations while you have much bigger budgets to worry about and other priorities at the same time.

Am I correct to assume that?

[John Knubley]

I'll say three things. Number one, it was not my number one priority. Number two, from the perspective of the role I played on appointments, I did have a to-do list. On that to-do list—not at the top, but probably in the middle—was the need to appoint someone as SDTC chair. I did hope that the process would be completed before I retired on June 28.

The third thing is a personal thing, which is that I actually had double hip surgery on December 18. I continued to work in January, February and March, but I did not really come back to work in the office until March. Why did I not participate in the process? I don't think I ever would have, but the fact is that from a physical perspective, I could not do so.

[The Chair, Conservative, John Williamson]

Thank you.

Mr. Drouin, do you have a last question?

Okay, very good. Thank you. We are done, then.

Mr. Knubley, I want to thank you for coming in today and for your testimony and participation in relation to our study. You mentioned in the first part of the meeting that you had some documents to submit. We're happy to receive those. You can send those to the clerk.

Members, I think you've received notice now that the Auditor General is tabling her fall reports on December 2, so just be aware of that. There'll be an especially long day with a lock-up and then a briefing with the Auditor General, both in camera and before committee.

On that, I will adjourn just a few minutes after one o'clock.

Thank you very much.