Madam Speaker, I am pleased to rise today to speak to this motion. I would like to address the substance of the issues raised and present the government's action to address allegations at SDTC and the actions we are taking to restore public trust and restore funding to Canada's world-class clean-tech sector that is helping deliver climate solutions and create the jobs of the future.
On Tuesday, we announced that we will transition SDTC programming to the National Research Council to enhance governance and ensure public confidence after recent reviews, including, but not limited to, the report of the Office of the Auditor General, which revealed lapses in SDTC's governance. We take those lapses very seriously. Transitioning SDTC programming to the NRC will ensure continued support for clean technology innovations, which, as we all know, is not only crucial for meeting Canada's climate targets, but is also helping companies scale up and grow, strengthening our economy and creating good jobs. The changes announced will provide continuity and stability for clean-tech companies across the country, ensuring that entrepreneurs can move forward confidently with current projects and SDTC employees have opportunities to continue their work to enable homegrown innovation. I will return to these themes in more detail in a moment.
First, let me provide some background on the facts, the specific issues raised, the reaction by the government and the key steps that we are taking. This government expects organizations that receive public funds to be held to the highest standards. When allegations of mismanagement at SDTC first came to light, our government took immediate action to undertake the proper due diligence to understand the facts. These were serious allegations that warranted a careful assessment of all of the evidence. Only with the facts could we then take the appropriate next steps.
As the first step, the government engaged an impartial third party, Raymond Chabot Grant Thornton, to undertake a fact-finding exercise. That fact-finding exercise focused on a review of documentation and interviews with key stakeholders related to organizational policies and procedures, program governance and the project approval process. RCGT also interviewed employees, external advisers, senior management, members of SDTC's board and government officials. After receiving this report, we took swift action to freeze any new funding to SDTC and we tasked the organization with a management response and action plan. We also began to work collaboratively with the Office of the Auditor General to support a full and comprehensive audit.
Just as the government has high standards for the use of government funds, we expect employees to benefit from a healthy and respectful work environment. Given this, in addition to the RCGT fact-finding exercise, the government took action to address allegations related to human resource practices at SDTC. With SDTC's consent, which was required due to the organization's status as a shared governance corporation at arm's length from Innovation, Science and Economic Development, ISED requested that the Department of Justice appoint McCarthy Tétrault LLP to undertake a fact-finding review of alleged breaches of labour and employment practices and policies at SDTC. Current and former employees were permitted to speak openly and freely to the law firm without violating any applicable settlement agreements or non-disclosure agreements. The report of the review, which the government has made publicly available, concluded that SDTC's leadership did not engage in the type of repetitive, vexatious or major-incident conduct that would constitute harassment, bullying or workplace violence under applicable standards.
Now, let me move on to two days ago, on June 4, when the Auditor General, as we all know, released the report of her audit of SDTC. As mentioned, the government welcomed the Auditor General's decision to undertake this audit and fully co-operated with the auditors. The Government of Canada agrees with the findings of the Auditor General's report on SDTC. We acknowledge the areas identified for improving governance, accountability and conflict of interest practices. Several of the recommendations are already being implemented by the organization, such as revising procedures for funding decisions and project oversight, as well as clarifying roles and responsibilities. The government is committed to working with SDTC to implement further measures that uphold transparency and prudent management of public funds.
Evidence collected from all of these independent reviews revealed lapses in SDTC's governance. We have never once denied that those are true lapses in its governance. The government listened and, as we saw yesterday, we are taking definitive action. To be clear however, the Auditor General did not report any evidence or suspicion of criminal behaviour.
As acknowledged by Ms. Hogan herself before committee on Tuesday, Innovation, Science and Economic Development Canada has reacted quickly and well in response to the findings in the reports. In October 2023, a management response and action plan was developed, which set out action items aimed at improving SDTC's governance, its conflict of interest management and human resource practices; and at enhancing ISED's oversight of SDTC to ensure that the organization is in full compliance with its contribution agreement. A reinforced contribution agreement with SDTC will formalize the enhanced governance practices and oversight measures set out in the MRAP.
Of chief importance among amendments and complementary MRAP actions are those that clarify, enhance and standardize SDTC's reporting requirements and processes, which will allow the government greater insight into and oversight of the organization's operations and management of public funds. To help restore confidence in SDTC's management of public funds for the benefit of Canadians, ISED has implemented enhanced standards for disclosure, documentation and management of conflicts of interest. Furthermore, active reporting requirements have been established to track conflict of interest disclosures and recusals. This includes measures specific to SDTC employees, external consultants, senior management and the board.
These measures will increase accountability, ensuring that any potential conflicts are managed effectively. They also introduce new requirements for declaring and documenting management of conflicts of interest within the foundation and reporting them to ISED. Collectively, these measures establish stronger governance and oversight of SDTC and will ensure increased transparency, accountability and confidence in the new board's ability to continue delivering benefits to Canadians as the programming transitions to its next phase.
Sustainable Development Technology Canada was created over 20 years ago in 2001. Canada's clean technology ecosystem looked very different at that time and was much less mature than it is today. The funding that has been provided since has helped to commercialize many clean technologies, and these projects continue to make valuable contributions to the Canadian economy, and the environment, today. It has been an example of how Liberal leadership in the environment and climate change has always supported economic growth in Canada, helping good companies grow and helping Canada be a leader in the world.
The governance model adopted by Parliament at that time in the Canada Foundation for Sustainable Development Technology Act provided for a high degree of independence, but the various reviews I have outlined prompted the government to take a close look at whether the governance structure of SDTC continues to be fit for purpose today.
After careful consideration, we determined that a new delivery model for SDTC programming was needed. This is why our government took action by announcing a new delivery approach that includes transitioning SDTC programming and employees to National Research Council Canada. In addition to its proven track record of providing tailored support to Canada's innovative small and medium-sized businesses, the NRC is a Crown agency and is subject to rigorous and stringent oversight of its personnel and finances. This will help rebuild public trust while increasing accountability and transparency in program delivery.
This transition will take several months, so the government appointed new SDTC leadership, made up of highly regarded and trusted individuals, to lead the important work ahead to ensure the terms and conditions of ongoing projects are respected, and appropriate employment opportunities for SDTC employees at the NRC are identified, because it is not just about sound governance; it is about people.
SDTC's employees have a wealth of experience and knowledge of the clean-tech sector and have been integral in helping Canada's clean-tech companies move from seed to start-up to scale-up. Their transition to the NRC will help ensure that Canada's clean-tech companies will be at the forefront in the fight against climate change by receiving the same type of support to innovate, grow and create well-paying, sustainable jobs. This support will continue with resumed funding for new, eligible projects in a sector vital to our country's economy and clean growth transition. In line with the Auditor General's findings, ISED will enhance oversight and monitoring of funding throughout the transition period.
Now, the opposition members do not take climate change seriously. We know that from their many actions and votes against climate change. Conservatives would rather play politics than make sure that Canada's clean-tech sector can keep paving the way for the solutions the world needs. However, we understand that confidence in SDTC must be restored so that these visionary entrepreneurs can receive the funding they need for their businesses. Continuity of support for our clean-tech sector is paramount in the fight against climate change, and to keep growing our economy and keep Canada competitive in a world looking for cleaner solutions.
We know that clean-tech companies have felt the impacts of the funding pause as this government took the time it needed to uncover the evidence and identify a robust governance solution. We have done what we set out to do, and we thank the clean-tech sector for its resilience and patience as we shape the way forward.
The wheels are in motion at ISED, the NRC and SDTC to make the transfer happen while ensuring continuity for clean-tech projects and SDTC employees. By transitioning the support for clean-technology innovators into the NRC, leveraging its robust governance structure, the government will maintain the strengths of the programming that have benefited Canada's clean-tech companies for over two decades.
Going forward, it is crucial that our efforts are focused on supporting Canadian innovators in the clean-tech sector. These companies are generating jobs and developing world-class technologies to respond to the impacts of climate change and build the economy of the future here in Canada.