Public Accounts Committee on Nov. 25th, 2024

[The Chair, Conservative, John Williamson]

That's good. Thank you very much.

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

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

Hello, Ms. Kolbuc. Thank you for being with us today.

You have a reputation in respect of both management of public funds and how you interact with your employees that might not be a positive one.

Let's start directly with some very specific questions. I would like to get brief answers, please, because my speaking time is limited.

The auditor general reported that at least two projects in her sample were not eligible for funds under the ecosystem stream. One of the two projects is the Saskatchewan Indian Institute of Technologies project. If we look at that project more closely, we see that there are a lot of things that do not work at all. Not only was the project not eligible, but, in addition, the consultant who practically wrote the application, Chris Wormald, was then paid by Sustainable Development Technology Canada, out of public funds, to assess the application he had written himself.

You are the director of that fund; you approved the fund, and you made sure that the fund received money. What can you tell me about that, please?

[Zoë Kolbuc]

What I'll say is that there were two projects that were approved by the former board of directors, including the Saskatchewan Indian Institute of Technologies. I was asked by the former CEO to conduct due diligence on an application that SDTC received—

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

Ms. Kolbuc, my question is very specific.

How could you have tolerated having an external consultant write an application and then retaining him again and giving him $10,000 of public funds to assess his own application? It says so right in the application.

I am asking you a very specific question. I am not asking you to go back over the entire genesis of all the funds in the ecosystem stream. Please answer my question: As director of the ecosystems fund, how could you have tolerated these kinds of conflicts of interest on your own team?

[Zoë Kolbuc]

I would have received the application from the Saskatchewan Indian Institute of Technologies from the former CEO. I was asked to conduct, with my team, due diligence on that application. The mandate of that project was to develop capacity amongst indigenous entrepreneurs, as the foundation had not received any applications from companies led by indigenous entrepreneurs. The mandate of the project was to support—

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

Excuse me, Ms. Kolbuc, but you are not answering the question.

You asked Chris Wormald to conduct the external assessment required under the contribution agreement. You asked the same person who wrote the application to do the assessment. That was stated right in the application.

I am not questioning the work done by the Saskatchewan Indian Institute of Technologies. I am questioning your judgment as the director of the ecosystem stream.

I am going to move on to the next question, since I am not getting an answer to that one.

You were on the team that was directed to pursue the Verschuren Centre project when there was obviously no online application possible. You selected the Verschuren Centre project as a possibility yourself.

When some employees raised doubts as to a possible conflict of interest, you told them that you had done the necessary checking with the board of directors and the government and that the conflict had been resolved. Several employees were in the room when you said that. However, when the project was submitted to the board of directors, quite obviously, some of the directors said that there was plainly a conflict of interest and they could not approve the project.

Did you lie to your employees, Ms. Kolbuc?

[Zoë Kolbuc]

I would always speak the truth to my employees. For this project, there was a perceived conflict of interest with the former chair. That conflict would have been adjudicated by the former board of directors, and it was. The project was never approved for funding.

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

So I will repeat my question.

When some employees raised the possibility of a conflict of interest, you told them that you had done the prerequisite checking, that there was no conflict of interest, and that everything was fine. Several people, who were in the room when you spoke, are able to testify to that for the purposes of our study. Afterward, the board of directors rejected the project. Quite obviously, the conflict of interest was so flagrant that it is reasonable for the board of directors to say there was a bit of a problem there.

First, how was it that you submitted this project to the board of directors as if there was nothing wrong, as if there was no conflict of interest?

Second, you told your employees, who had raised doubts, that there was no conflict of interest and you had done the necessary checking; how do you explain that? How can you justify telling your employees that you had checked? Did you make a mistake? Did you dream that you had checked?

Your testimony seems to flatly contradict the testimony of several employees who were in the room when you confirmed that you had done the necessary checking regarding the conflict of interest.

I need an answer. I have asked you several questions now and got no answers. Please answer the question.

[Zoë Kolbuc]

I'm going to answer your question to the best of my ability. I don't know what meeting you might be talking about, so it's hard for me to verify what someone claims I said.

What I can share is that, if there had been a potential conflict of interest with the board of directors, it would have been adjudicated by the board of directors. If the board had made a decision to fund that project, I would have been responsible in my role—

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

Just a minute; are you saying that the executives at Sustainable Development Technology Canada had no obligation to comply with the conflict of interest policies and that it was solely up to the board of directors to determine whether there were conflicts of interest?

I am telling you that this is your responsibility. You are paid out of public funds. It is your responsibility to make sure that there are no conflicts of interest in the projects you fund and for which you are responsible. You are a senior executive in your organization. It is not up to the board of directors to decide; it is up to you to do that.

[Zoë Kolbuc]

The Auditor General has highlighted that there were gaps in the governance and oversight of the foundation in the management of conflicts of interest. As the foundation, we've accepted all of those recommendations and put them in place. We are following those procedures as well, and they have certainly strengthened the management of conflicts of interest within the foundation.

[The Chair, Conservative, John Williamson]

Thank you, Ms. Sinclair‑Desgagné.

Next is Mr. Cannings for six minutes, please. You have the floor.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Thank you, Ms. Kolbuc, for being with us today.

I'll start by trying to understand exactly what your role is. I'm an ecologist by training, so ecosystem probably means something a bit different. It is, I think, a relatively new term in the business community.

You touched on this in your opening remarks, but could you tell me what it means if you're a VP of ecosystems?

[Zoë Kolbuc]

Absolutely. I also had those same questions when I was assigned this title and really spent some time determining, understanding, the importance of ecosystems in the work we do. The way it works is that, if you think of a company or an entrepreneur that's trying to develop a new and innovative business idea that's never been developed before or is trying to do something very challenging, you recognize that there's an ecosystem of supporters that would surround that company.

That would mean different partners that they would work with. That could be advisers. That could be investors. That could be different technical experts they would have. It could be different funding opportunities across various governments. Really, the role of vice president, ecosystems, was to lead a team that would have relationships with all the different players within the ecosystem surrounding a company and would build relationships that could help to support those companies.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

I guess it's the same thing in a natural ecosystem. Everything is connected to everything else.

You said that you had worked with 85 partners. Are these like accelerators that would be connected to all the companies as well?

[Zoë Kolbuc]

Yes. They're entrepreneurial support organizations. Accelerators is one of the terms, but it's organizations that would be working with companies across the country.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

I guess the question that comes out of this in my mind is this: Is it just inherently problematic in the structure of that whole ecosystem to then have people within that ecosystem assessing grant applications? Because they're all connected to everybody else, there are going to be conflicts of interest all over the place. I'm just wondering—maybe this wasn't in your mandate—why this was decided to be the structure of assessing these applications when....

Let me phrase it differently. Is the sustainable tech ecosystem or the start-up ecosystem smaller than other ecosystems, I'll just say, in the business world? Is this the kind of a place that would just generate conflicts of interest automatically? I'm just wondering why this was set up in this way in the first place.

[Zoë Kolbuc]

An important point that I should say is that the accelerators were not assessing the applications. The accelerators are almost like a referral partner—right?—like a nominator, and they would be providing supports to the companies in another way.

They weren't paid to assess any of the applications. What I can say is that, for those nominations, then, the company—the application, the grant application—actually went through an eligibility review. You'd have a panel of experts that would look at it to ask questions. Then it would be recommended to the project review committee, and then the board of directors ultimately would make the final decisions on any funding.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

What was your background in this ecosystem? I know that you worked for the Ralph Klein government back in the day on health issues or something, but what was your experience that gave you this position?

[Zoë Kolbuc]

Yes. I have deep experience in developing partnership relationships, external relations and communications, as well as an understanding of business, having spent a decade in the private sector as well. That would be the background and experience that I brought to this role.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Thank you.

That's all I have for now.

[The Chair, Conservative, John Williamson]

Thank you, sir.

We're beginning our second round, which will be six rounds of various times.

Mr. Cooper, you're going to lead us off for five minutes, please.

[Michael Cooper, Conservative, St. Albert—Edmonton, AB]

Thank you very much, Mr. Chair.

Ms. Kolbuc, I'm going to ask you some questions with respect to the application for funding by the Verschuren Centre.

When the decision was made to not move ahead with the funding application, the then VP of investments and current COO, Mr. Rahme, on January 18, 2022, wrote to the Verschuren Centre and stated that SDTC would give “best efforts” to help the Verschuren Centre secure funding from other government departments and agencies, notwithstanding the obvious conflict of interest that Annette Verschuren was chair of SDTC and, at the same time, was the founder of and sat on the board of directors of the Verschuren Centre. It was her personal vanity project.

Who directed, who was it and whose decision ultimately was it to direct staff to undertake efforts for the Verschuren Centre to receive government funding from other departments and agencies?

[Zoë Kolbuc]

As I responded earlier, I did look up that email that you mentioned, and subsequent emails, just to remind myself. It was a while ago, and I was unfortunately experiencing an episode of long COVID, which had me not at work for part of that time period. However, what I do recall is that the Verschuren Centre had actually asked SDTC to not support them in finding funding after receiving news that their project with SDTC was not going to be moving forward.

[Michael Cooper, Conservative, St. Albert—Edmonton, AB]

That's inconsistent with the testimony of Mr. Rahme, who wrote the letter on January 18. When he was asked about it, he conceded, based on his testimony, that efforts were made. Why wouldn't he have said that no efforts were made if, in fact, that were the case?