Public Accounts Committee on Nov. 20th, 2024

I have been involved in the Osler study, the Raymond Chabot study and those of the Auditor General and the Ethics Commissioner. I have provided my input and documentation to all of those committees.

The member may be right in terms of my timing with the Auditor General.

At the time that I was leaving, the Raymond Chabot report had been prepared. We absolutely accepted and responded to that Raymond Chabot report. We prepared a management's response to that. Basically, we tightened up and improved processes from the management side and the board side in terms of conflicts of interest. That was really important to have done.

The Auditor General's report and the Ethics Commissioner report happened after. You're right.

Bloc

Nathalie Sinclair-Desgagné Bloc Terrebonne, QC

The reports did not present the same conclusions. I'll therefore repeat my question.

Do you accept the much more serious conclusions made by the Auditor General of Canada and the Conflict of Interest and Ethics Commissioner? Or do you instead accept the conclusions presented in the reports from Osler, Hoskin and Harcourt and from McCarthy Tétrault, as well as, to a lesser extent, in the final report from Raymond Chabot Grant Thornton? We also know that the findings in the preliminary report submitted in May were slightly more serious.

Which conclusions do you accept?

As an Individual

Certainly, the Ethics Commissioner's report was based on my personal, specific issues.

The Auditor General's report is very broad in scope. It was extraordinarily broad. It focused on the history of SDTC. It included time that I was not chair, from 2017. It focused on the parts of the decisions made by management. A lot of it did. I was not part of the management team.

From what I've seen in the media, it's my understanding the SDTC has already adopted most of the Auditor General's recommendations.

Conservative

The Chair Conservative John Williamson

Thank you.

Mr. Boulerice, you have the floor for two and a half minutes.

NDP

Alexandre Boulerice NDP Rosemont—La Petite-Patrie, QC

Thank you, Mr. Chair.

Ms. Verschuren, at one point, you sought legal advice from a third party on the notion of conflict of interest. In fact, you consulted a lawyer, and you paid for that service.

Why didn't you go to the federal Conflict of Interest and Ethics Commissioner, who is an expert in this field? It wouldn't have cost you anything.

Why go to a lawyer rather than to the Commissioner on these issues?

As an Individual

That lawyer did a lot of work with SDTC. He was independent and a partner in a major legal firm, so we obviously felt he was very qualified.

NDP

Alexandre Boulerice NDP Rosemont—La Petite-Patrie, QC

The Conflict of Interest and Ethics Commissioner is also very qualified. It's his job.

As an Individual

Yes, it is his job.

I want the committee to reflect on that time. This was three weeks after COVID. All of these companies were not receiving revenue. They were in trouble. They were seriously concerned about making payroll. We received that recommendation from our lawyer. Management received it. The board received that recommendation and accepted it.

NDP

Alexandre Boulerice NDP Rosemont—La Petite-Patrie, QC

A story in the media revealed that you were being investigated for a conflict of interest. Three days later, on November 20, you resigned. In fact, you did so faster than Randy Boissonnault.

If you believed you'd done nothing wrong at the time, why did you resign?

As an Individual

I was the focus of a lot of negative press. I wanted to take the focus—that negative press—away from SDTC, so that it could be free to move forward. That was the reason.

November 20th, 2024 / 6:30 p.m.

NDP

Alexandre Boulerice NDP Rosemont—La Petite-Patrie, QC

Ms. Verschuren, you admitted to confusing the act of abstention from voting with recusal. Section 21 of the Conflict of Interest Act specifically addresses this question.

You were put in charge of a board that managed hundreds of millions of dollars, and no one explained to you the difference between abstaining and recusing yourself.

Is that what you're saying?

As an Individual

I take responsibility for not following those sections of the act. I was following the procedures that happened before I became the chair and were recommended by senior management.

NDP

Alexandre Boulerice NDP Rosemont—La Petite-Patrie, QC

Is it standard procedure not to provide the necessary training on section 21? The training would have allowed you to distinguish between abstaining and recusing yourself.

You're saying that this is standard procedure. In my opinion, the fact that you did not receive adequate information seems fairly abnormal.

As an Individual

In retrospect, if I had to do it over again, I would obviously recuse myself in every situation, and—

Conservative

The Chair Conservative John Williamson

Thank you.

Pardon me. I didn't mean to cut you off. I try to allow the witnesses to have the last word in questioning. You're welcome to continue.

As an Individual

I'd just add, Mr. Chair, that I took the advice of a lawyer.

Conservative

The Chair Conservative John Williamson

We have two more members remaining.

Mr. Cooper, you're up for five minutes, please.

Conservative

Michael Cooper Conservative St. Albert—Edmonton, AB

Mr. Chair, despite Mr. Erskine-Smith's profound ignorance of the rules of the Ontario Securities Commission, Ms. Verschuren, as someone who served as a director on publicly traded companies, you will be aware that, under the rules relating to insider trading and self-dealing, directors cannot buy and sell shares in the company days after a public announcement. Rather, they can only do so during limited windows outside the quarterly financial reporting periods, yet the conflict of interest rules for the SDTC board, which violated the act, allowed board members to buy and sell securities within three days of a funding announcement.

I ask you this again: Why didn't you fix the policy? It sure sounds like a good deal for board members.

As an Individual

Again, I followed the procedures that were established at the time that I joined that board. Reviewing these things was the responsibility of management and—

Conservative

Michael Cooper Conservative St. Albert—Edmonton, AB

So you take no responsibility.

I'll ask you this: What constituted a public announcement? Was it just a press release posted on the SDTC website? Is that a public announcement?

As an Individual

I don't recall.

Conservative

Michael Cooper Conservative St. Albert—Edmonton, AB

If Mr. Erskine-Smith wants to dispute whether it's technically insider trading or akin to insider trading, it certainly is a racket, it certainly is corruption and it certainly is a very different standard than the five years that staff members at SDTC had to wait before they could do what you permitted yourself to do as a member of the SDTC board.

Speaking of law-breaking during your time as chair of the SDTC board, your fellow board member, Andrée-Lise Méthot—being a very close friend of the Minister of Environment, Steven Guilbeault—admitted, when she appeared before this committee, that the board funnelled $10.4 million from SDTC to companies that she had interests in through her investment firm, Cycle Capital.

How did you allow that to happen?

As an Individual

Again, Mr. Chair, this was part of the decision-making process in terms of the COVID payments and—

Conservative

Michael Cooper Conservative St. Albert—Edmonton, AB

No, Ms. Verschuren, $10.4 million went into companies that Ms. Méthot had an interest in, and these were not COVID-related payments. Ms. Méthot left the room, in fact, when the monies went out the door. However, subsection 12(2) of the act states very clearly that “no director shall profit or gain any income or acquire any property from the Foundation or its activities.” The act wasn't complied with, just as the conflict of interest policy that you had in place didn't comply with that section of the act.

Again, how did you allow $10.4 million unlawfully to be funnelled into Andrée-Lise Méthot's companies?

6:35 p.m.

As an Individual