Evidence of meeting #133 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 projects.
A video is available from Parliament.
4:35 p.m.
Conservative
The Chair Conservative John Williamson
Thank you very much.
Beginning our third round, Mr. Perkins has the floor again for five minutes.
4:35 p.m.
Conservative
Rick Perkins Conservative South Shore—St. Margarets, NS
Thank you, Mr. Chair.
I'll pick up with you there, Mr. Boothe. You were a deputy minister of finance. You have had a distinguished career in the public service. SDTC had an ADM at every single board meeting that happened. Half of the transactions that the board passed were conflicted. Do you believe that the ADM reporting to you would never tell you, as the deputy minister, that half of an $800-million fund of taxpayers' money was being voted to the directors themselves? Do you believe he would never tell the deputy about that?
4:35 p.m.
Chair, Board of Directors, Sustainable Development Technology Canada
Mr. Chair, it's very difficult for me to say what the assistant deputy minister knew and what he reported to the deputy minister. I honestly don't know.
4:35 p.m.
Chair, Board of Directors, Sustainable Development Technology Canada
One thing I will say is that this goes back to what I just said about the legislation. This is an arm's-length body—
4:35 p.m.
Conservative
Rick Perkins Conservative South Shore—St. Margarets, NS
I'm sorry, Mr. Boothe. I didn't ask you about the legislation, because there was not a single chair of this board since its establishment in 2001 who had a conflict—not one—until Annette Verschuren, and she was appointed over the objections of the senior management team, which told the ADM, the deputy minister and the minister's office that they shouldn't appoint a board member who was conflicted, yet they did.
It boggles my mind that we've had ministers here like Navdeep Bains, who, in doing his Sergeant Schultz routine, claimed that he knew nothing and he doesn't remember anything. All he was responsible for was appointing corrupt Liberals to the board. He wasn't responsible for overseeing the corrupt Liberals on the board. It's appalling to me that everyone has said, “It's not my fault. We just let it go on.”
I would think that you, as a former deputy minister, would be appalled by the fact, regardless of who it was, that a deputy minister would sit here and say, “I didn't know anything. I spent absolutely no time overseeing, when I had an ADM in every meeting, and I spent absolutely no time figuring out how they're doing it.” It's beyond belief that an ADM sitting in on every single one of these board meetings...unless it's because he was asking one of the previous chairs for a job outside of government. Maybe he was conflicted.
It's incredible to think that we're going to get the same old stuff, the same old management, the same old approach, the same old “whatever, okay, they were legitimate companies and everyone's conflicted and everyone in this industry is conflicted”. Half of all the transactions in the audit period had a problem, and there's absolutely no way that the four directors who did this are in control of half of all the companies in the entire green technology industry. It just happened that the half they had an interest in managed to get through the system.
Come on. It's a conspiracy of corruption and defrauding the taxpayer, and nobody in the government seems to care—no current minister, no current deputy minister—and you, as a former deputy minister of finance, don't seem to care, yet they've put you in charge.
4:40 p.m.
Chair, Board of Directors, Sustainable Development Technology Canada
I'm sorry, Mr. Chair. Is there a question?
4:40 p.m.
Conservative
Rick Perkins Conservative South Shore—St. Margarets, NS
Why are you not appalled by this? Surely in two weeks you've had the opportunity to look at some of this stuff in preparation for appearing today.
4:40 p.m.
Chair, Board of Directors, Sustainable Development Technology Canada
In preparation for my appearance today.... I mean, I did quite a lot of things in the past two weeks and I prepared a list. I don't think the honourable member is asking that. I spent most of my time becoming familiar with the Auditor General's report.
I haven't looked at any individual files yet, and I'm not ready to do that, but the one assurance I will give you is that I will implement the Auditor General's report to the best of my ability and make sure that no funding goes forward that isn't compliant.
4:40 p.m.
Conservative
Rick Perkins Conservative South Shore—St. Margarets, NS
Okay. I appreciate that.
This is for the Auditor General. There's a fellow named Chris Wormald. He was the business review analyst for this outside consultant, and he put forward reports—we have copies of them—that said a number of these projects should not be approved and shouldn't be qualified under the fund. Then, within only a couple of months, he put forward a report saying, “Oh, sorry, I changed my mind; these should be approved.” It so happens that the ones he changed his mind on were all financially owned by one of the directors.
Did you, as the Auditor General, as part of the governance analysis, understand and look in depth at this fellow, Chris Wormald, and all of those things that were off the table and rejected and then mysteriously back on the table and that happened to be ones the directors owned?
4:40 p.m.
Auditor General of Canada, Office of the Auditor General
As I mentioned before, we don't look at the individual actions of a person. We went to the organization, but I believe the honourable member is talking about a reference in paragraph 6.42, where we did highlight that there was an external expert who had a conflict and wasn't removed. Again, this is an instance where the conflict of interest policy didn't cover things or wasn't followed, so I believe that we highlighted a couple of those situations in paragraph 6.42.
I can ask Mathieu to add to that, if you would like more details.
4:40 p.m.
Principal, Office of the Auditor General
The companies that had been reviewed by this individual were in our sample. We reviewed them, but we did not expand the work with this person in mind. We looked at what was in the sample. The two companies you're talking about were in the sample, so this is how we picked up on the situation.
4:45 p.m.
Conservative
The Chair Conservative John Williamson
Thank you.
Ms. Yip, you have the floor for five minutes, please.
4:45 p.m.
Liberal
Jean Yip Liberal Scarborough—Agincourt, ON
Thank you, Mr. Chair.
I think I'll give Ms. Hogan a bit of a break and I'll turn to Mr. Boothe.
Are you involved in employee transfers from SDTC to the NRC?
4:45 p.m.
Chair, Board of Directors, Sustainable Development Technology Canada
I'm not sure what you mean. Am I involved? As chair of the board, I will be involved, although I'm not leading the planning for the transfer of programming and staff to the NRC. That's one of my board colleagues.
4:45 p.m.
Liberal
Jean Yip Liberal Scarborough—Agincourt, ON
Can you talk about how these transfers are happening and the number of employees who are being transferred over?
4:45 p.m.
Chair, Board of Directors, Sustainable Development Technology Canada
First of all, SDTC is a pretty small organization in terms of staff. I think it's in the neighbourhood of 75, so it's relatively small compared to the National Research Council.
The minister has already said that all the staff from SDTC will be offered employment at the NRC, but of course, it remains to be seen how many of them decide they want to take that up. This is one of the things that I've been thinking about. There's a lot of expertise there, and the folks at the NRC in our preliminary meeting recognized that. We'll have to try to make sure we don't have a big loss of expertise as the programming moves over to the council.
4:45 p.m.
Liberal
Jean Yip Liberal Scarborough—Agincourt, ON
To your knowledge, why was it decided that, as an important part of this new governance structure, we transfer the existing employees to the NRC?
4:45 p.m.
Chair, Board of Directors, Sustainable Development Technology Canada
I'm sorry. I didn't quite hear the question.
4:45 p.m.
Liberal
Jean Yip Liberal Scarborough—Agincourt, ON
To your knowledge, why was it decided that the transferring of employees to the NRC was an important part of this new governance structure?
4:45 p.m.
Chair, Board of Directors, Sustainable Development Technology Canada
I can't say for sure what was in the minister's mind when he made this decision. Certainly, ministers get advice from their departments, but they also have other considerations.
A move to the NRC—and the Auditor General has alluded to this—does help deal with some of the conflict of interest issues because the public service has very clear and strict rules about this. I was a public office holder for many years, and I've experienced it myself. In terms of reporting and accounting, those things will be simplified a great deal with the transfer to the NRC.
There are some synergies. IRAP has a lot in common with SDTC's programming. The people who work in it are in the field. Most of them are in the private sector or from the private sector. They deal with private sector companies, sometimes the same companies. There are some synergies, and in our preliminary meeting, the NRC recognized that. However, it's going to be a complex process to move private sector folks into a public sector organization. There's a lot of work to do.
4:50 p.m.
Liberal
Jean Yip Liberal Scarborough—Agincourt, ON
Thank you.
Ms. Hogan, one observation that's been raised is the challenge that organizations like small clean-tech companies in Canada are part of a small and closely linked ecosystem. What is your insight into how organizations operating in this type of ecosystem should conduct themselves to make sure that all guidelines are being followed, regardless of ethics and so forth?
4:50 p.m.
Auditor General of Canada, Office of the Auditor General
I'm not sure I have thoughts on what to tell all the small organizations in the clean-tech industry. What I was looking at was how the foundation was managing those conflicts of interest.
I truly believe that in the SDTC act was an inherent conflict. Ensuring that the board members have the expertise in such a small niche market was bringing in inherent conflicts. That's why I would have expected a much more rigorous process around managing conflicts of interest.
It was difficult at best to go through many series of minutes to see when a conflict was declared and then trace whether someone had voted or participated in a conversation about a company that caused them to be conflicted. It was clear that not having a system to manage that is what caused many of the conflict of interest issues.
I think it's about making sure that there's rigour, especially when public funds are involved.