Evidence of meeting #154 for Public Accounts in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was sdtc.

A video is available from Parliament.

On the agenda

MPs speaking

Also speaking

Andrew Noseworthy  As an Individual
Clerk of the Committee  Ms. Hilary Smyth

4:35 p.m.

Conservative

The Chair Conservative John Williamson

Good afternoon, everyone.

I call this meeting to order.

Welcome to meeting number 154 of the House of Commons Standing Committee on Public Accounts.

Today's meeting is taking place in a hybrid format, pursuant to the Standing Orders. Members are attending in person in the room and remotely using the Zoom application.

Before we begin, I'd like to ask all in-person participants to read the guidelines written on the updated cards on the table. These measures are in place to help prevent audio and feedback incidents in order to protect the health and safety of all participants, including and especially our interpreters. I have a kind reminder to all those here in person as well as online. For the safety of our interpreters, it is very important that your microphone is muted when you're not speaking.

Thank you in advance for your co-operation.

I'll remind you that all comments should be addressed through the chair.

Pursuant to Standing Order 108(3)(g), the committee is resuming consideration of report 6, Sustainable Development Technology Canada, of the 2024 reports 5 to 7 of the Auditor General of Canada.

I'd like to welcome our witness, appearing as an individual and joining us online, virtually, Mr. Andrew Noseworthy.

Mr. Noseworthy, you have up to five minutes for an opening statement, if you'd like. The floor is yours.

Andrew Noseworthy As an Individual

Thank you, Chair.

Yesterday, I had a minor accident and injured my face and lips, which sometimes makes it so that my voice is raspy and less clear. I apologize for any inconvenience this creates for the committee. Please let me know if you wish me to repeat anything.

I appear before you today as a private citizen, having retired last January after 40 years of public service. I began working at ISED in 2016. My initial role was to co-chair a federal-provincial working group on clean technology. As the department's mandate on clean technology expanded, my role also expanded around strategic policy issues and outreach within Canada's clean technology community.

Beginning in 2017, I became the department's liaison with SDTC. I regularly attended board meetings between 2017 and early 2023. I played no formal role in board meetings, and the board minutes referred to me as being there by invitation.

Consistent with others who had held this role before me, I saw my role as assisting the board in understanding federal policy and program developments that may have relevance to its work. This engagement was also helpful to me in my broader work on clean tech, as SDTC was recognized as a long-time player in the sector.

A management action plan tied to ISED's 2018 evaluation of SDTC set out priorities that guided my work with SDTC. These included activities for improving performance data and reporting, policy development to move beyond early-stage technology pilots and promote commercialization and entrepreneurship, and finally, the development of a cross-government service to better integrate and coordinate the services that government provides to the clean-tech community.

SDTC's contribution agreement with ISED states that federal officials must not be seen as exercising control or influencing the decisions of that organization. I was therefore especially careful not to offer views or advice of any kind that could be seen to influence or bind its operations, policies or project decisions.

I did not attend, nor was I privy to, meetings of board subcommittees or other internal SDTC meetings where projects, conflicts of interest, HR issues or administrative matters were discussed. My vantage point on conflicts of interest was limited to what was contained in a package of documents provided to board members, typically a few days before each meeting, and what I witnessed in the personal conduct of board members at meetings. I did not have any special insight into the real or perceived conflicts of board members. I knew that it was their responsibility individually to address them if they existed.

What I saw in board meetings was a process entirely consistent with many boards, where members routinely note potential conflicts of interest and recuse themselves. No issues or concerns about board member conflicts were ever raised with me by SDTC staff or other members of the board.

With respect to the appointment of Ms. Verschuren as chair, I had no direct role in the PCO-led process. I played no role in interviews or screening activities. I offered no advice to anyone on potential candidates.

I was asked by the deputy minister's office of ISED on two occasions to send emails to the clean-tech stakeholder community to encourage them to nominate potential candidates for this position. I understand that this is a common procedure supporting central agency appointments processes—

4:40 p.m.

Conservative

The Chair Conservative John Williamson

Excuse me, Mr. Noseworthy. I apologize.

There seems to be an issue with the sound, and maybe with interpretation as well.

I'm just going to suspend for a second and consult with the clerk.

Mr. Noseworthy, the clerk might have a question or two for you. I'll turn it over to our clerk, please.

The Clerk of the Committee Ms. Hilary Smyth

Mr. Noseworthy, could you speak for 15 seconds? How is the weather today?

4:40 p.m.

As an Individual

Andrew Noseworthy

The weather in Newfoundland, as you might anticipate, is atrocious.

4:40 p.m.

Conservative

The Chair Conservative John Williamson

And tomorrow, will it be any different?

4:40 p.m.

As an Individual

Andrew Noseworthy

Fall in Newfoundland, sir, is always a charm.

The Clerk

It seems to be a little bit better now.

4:40 p.m.

Conservative

The Chair Conservative John Williamson

Mr. Noseworthy, you may proceed.

If you want to back up 20 or 30 seconds if you're in the middle of something, that will be fine. I will ensure you have the time to finish up. Thank you.

4:40 p.m.

As an Individual

Andrew Noseworthy

Thank you, sir.

I was asked by the deputy minister's office of ISED on two occasions to send emails to the clean-tech stakeholder community encouraging them to nominate potential candidates for the position of chair of SDTC. I understand that this is a common procedure supporting central agency-led appointments processes.

In June 2018, I was also asked to contact Ms. Lawrence, as CEO of SDTC, to advise her that an order in council had been issued appointing Ms. Verschuren as SDTC chair. I remember Ms. Lawrence and I discussing the CEO selection process several times in 2018, and I believe that she was the one who advised me of Annette Verschuren's candidacy, noting that she had encouraged her to seek the advice of the Conflict of Interest and Ethics Commissioner. I did discuss this matter with the deputy minister, and we both understood that Ms. Verschuren had sought advice, which we assumed would be implemented and taken into account in the appointments process. At no time did I doubt that this was happening.

With respect to my relationship with Ms. Verschuren, I first met her in 2017 or 2018 as part of the department's outreach on clean tech. She was a member of the CEO clean-tech sector table, to which I acted as secretary. Our relationship was solely a professional one.

On the allegations regarding HR and administrative issues at SDTC, I had no knowledge of this until I learned of the whistle-blower's allegations. I immediately discussed this situation with the deputy minister, and we agreed that I should withdraw from any further engagement with the board while the matter was under investigation. To avoid any risk of real or perceived bias in the investigatory process, I also played no role in it.

Thank you, Mr. Chair. It's over to you.

4:40 p.m.

Conservative

The Chair Conservative John Williamson

Thank you, Mr. Noseworthy.

I'm going to get through three rounds in this session. The first round will consist of four members, for six minutes each.

Mr. Perkins, you'll lead us off, please.

4:40 p.m.

Conservative

Rick Perkins Conservative South Shore—St. Margarets, NS

Thank you, Mr. Chair, and thank you, Mr. Noseworthy.

Mr. Noseworthy, when you were assistant deputy minister at the industry department, you served as an observer on the board at SDTC for six years, as I understand it, until you retired in 2023. Is that correct?

4:40 p.m.

As an Individual

Andrew Noseworthy

Sir, first, I take issue with the word “observer”, which I believe implies a greater responsibility than I had. I was there at their invitation to offer information, and nothing further.

I withdrew from the board before I retired, when we first became aware of the whistle-blower's allegations. I believe that was—

4:45 p.m.

Conservative

Rick Perkins Conservative South Shore—St. Margarets, NS

You say you were there at the board's invitation. Your boss at the time, for most of that time, former deputy minister Knubley of the industry department, said he insisted that you be at the meetings as his eyes and ears. Are you incorrect in your assumption, or is he incorrect in what he told the committee?

4:45 p.m.

As an Individual

Andrew Noseworthy

Sir, I'm not sure these things are mutually exclusive. If you take a look at the board minutes, they clearly indicate that I'm there at the invitation of the board.

4:45 p.m.

Conservative

Rick Perkins Conservative South Shore—St. Margarets, NS

I will take it that your immediate boss, the deputy minister, had the correct framing of what your role was, to be his eyes and ears, because he said that not all deputy ministers agreed with that approach to agencies and boards, but he insisted on that in the ones at ISED.

So, since you were there to be his eyes and ears on what was going on, you must have had regular meetings with him about what was going on.

4:45 p.m.

As an Individual

Andrew Noseworthy

Mr. Chair, I spoke regularly to both Deputy Minister Knubley and Deputy Minister Kennedy when I was in my position. We carried on discussion over a wide range of issues. SDTC would certainly come up when there was a matter of specific concern.

With respect to Mr. Knubley, our key concerns were around the issues related to the implementation of the management action plan that came out of the evaluation of that organization in either 2017 or 2018 and how to better see the organization integrate into policy on the federal side.

4:45 p.m.

Conservative

Rick Perkins Conservative South Shore—St. Margarets, NS

Being the eyes and ears of your deputy minister in the Liberal green slush fund, did you ever read the SDTC act?

4:45 p.m.

As an Individual

Andrew Noseworthy

Yes, of course, sir, I did.

4:45 p.m.

Conservative

Rick Perkins Conservative South Shore—St. Margarets, NS

Then you're familiar with the clause on page 9 of the act on directors not profiting. It says:

Except as provided under subsection (1), no director shall profit or gain any income or acquire any property from the Foundation or its activities.

Yet, we know that the Auditor General has found that nine directors, for a total of 82% of the transactions, were conflicted when money was voted to companies they had, representing $330 million in that loan. Then, of course, there's the $59 million that the Auditor General found that they voted for companies, some of which were their own, totally outside of the contribution agreements you referenced.

I would like to know this: Since you read the act, and since you saw them voting for each other's companies, did you ever raise that with the deputy minister?

4:45 p.m.

As an Individual

Andrew Noseworthy

Sir, what I saw in front of me at SDTC was a regularly functioning board where people would recuse themselves when they thought there was a real reason to.

4:45 p.m.

Conservative

Rick Perkins Conservative South Shore—St. Margarets, NS

I'll read it again, because I don't see anywhere in the act where it says it's okay to vote yourself property or investments if you recuse yourself. Let me read it again:

Except as provided under subsection (1), no director shall profit or gain any income or acquire any property from the Foundation or its activities.

When tens of millions of dollars were going to directors' funds.... I'm not sure what level of conflict would have worried you. You watched Andrée-Lise Méthot vote $10.7 million to her own companies, by her own admission, although the number is actually higher. You saw Stephen Kukucha and Guy Ouimet vote money for their own companies and have fellow directors vote for that, for a total of $300 million, and you were sitting there. It was 82% of the time. They began each meeting by outlining which director and which project was conflicted: “You know, my friend here or this director here, his project is up, so he's conflicted and he'll just get out and recuse himself.”

It was 82% of the time. You sat in those meetings when things were happening, and you never reported that to your boss.

4:45 p.m.

As an Individual

Andrew Noseworthy

Sir, I had no way of independently assessing conflicts of interest by the board, specifically with the interpretation that you are applying to the act. I am not a lawyer—

4:45 p.m.

Conservative

Rick Perkins Conservative South Shore—St. Margarets, NS

Interpretation...? I'll do it again:

Except as provided under subsection (1), no director shall profit or gain any income or acquire any property from the Foundation or its activities.

That's not very complicated. That's not tough. You don't have to be a lawyer. Even a bureaucrat could figure out that means you cannot vote for your own companies to receive money from the board you're on. It's against the act.

You, sir, were responsible for being the eyes and ears of the deputy in that meeting. I just don't believe that you never told him that these things were going on. Who are you covering up for?

4:45 p.m.

As an Individual

Andrew Noseworthy

Mr. Chair, I had very limited information upon which to look at issues of conflict of interest—