PACP Committee Meeting
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Standing Committee on Public Accounts
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EVIDENCE
Monday, November 25, 2024
[Recorded by Electronic Apparatus]
[Translation]
I call the meeting to order.
Welcome to meeting number 153 of the House of Commons Standing Committee on Public Accounts.
[English]
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 tables. These measures are in place to help prevent audio and feedback incidents.
As a kind reminder to all those in person and online, for the safety of our interpreters, it is very important that your microphones are muted when you are not speaking.
[Translation]
Thank you for your co‑operation.
[English]
As a reminder, all comments should be addressed through the chair.
[Translation]
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.
[English]
I would like to welcome our witness from Sustainable Development Technology Canada. We have Zoë Kolbuc, vice-president of ecosystems.
Ms. Kolbuc, you'll have five minutes for an opening statement, if you'd like. I'll turn things over to you.
Thank you, Mr. Chair.
Thank you to the committee for the invitation to appear today and participate in your study of the Auditor General's “Report 6: Sustainable Development Technology Canada”.
My name is Zoë Kolbuc. I am joining you today virtually from my home in Calgary, Alberta, on Treaty 7 territory, where I recognize the traditional territories and oral practices of the Blackfoot Confederacy, the Siksika Nation, the Piikani Nation, the Kainaiwa, the Tsuut’ina Nation, the Stoney Nakoda nations and the Métis Nation of Alberta Region 3.
I began my work with SDTC almost eight years ago. It has been an honour to work with the many skilled and talented professionals at the foundation, each of whom remains steadfastly committed to advancing sustainable economic growth in Canada. Through our work together, the foundation has supported hundreds of clean technology businesses, which are generating jobs and contributing to local economies across the country as they tackle global sustainability challenges.
In my role as vice-president of ecosystems, I am responsible for a team of individuals who work in regions across Canada. These individuals are tasked with helping build awareness of SDTC funding to ensure broad representation of applicants from across Canada. This work includes outreach to provincial funding programs, including one-window partnerships in British Columbia, Alberta and Quebec, and outreach to potential partners and investors, as well as supporting a whole-of-government approach to help connect companies to the various supports the federal government offers.
I was also assigned the responsibility of managing the application process for the seed funding stream following the establishment of this new funding stream in 2019. This stream focused on early-stage funding to advance clean-technology innovation, and it was developed to foster and encourage collaboration through partnerships across Canada. Applicants were required to meet a series of eligibility requirements as outlined in the contribution agreement. They were screened by a panel of experts, presented to SDTC's project review committee and then recommended to the board for approval.
In launching this stream, an explicit target was to grow the number of women-led companies that SDTC was supporting. Prior to the funding pause last fall, over a third of the companies funded were led by women. This approach helped to expand SDTC support across Canada through a network of over 85 partners. It also resulted in SDTC supporting firms in every province in Canada for the first time in the history of the foundation.
I was also involved in the two pilot projects that were approved under the ecosystems pilot funding stream.
Lastly, I want to respond to some past testimony at this committee regarding my conduct as a leader. I was surprised and deeply saddened by the allegations. I have always strived to foster an inclusive, supportive and respectful workplace and to conduct myself with the same values of integrity, empathy and kindness that I look to instill in my three young daughters. These allegations were thoroughly reviewed by McCarthy Tétrault and its final conclusions on these matters are on the public record.
I want to close my remarks by wishing all of the talented and dedicated colleagues I work with at SDTC the very best as they transition to the National Research Council. I will continue to support them and the new board in fulfilling its mandate to ensure that the transition is as smooth as possible for my exceptional colleagues, as well as for the entrepreneurs and small business owners SDTC supports.
I welcome your questions.
Thank you very much, Ms. Kolbuc.
We'll now begin our first round, which will consist of four members with six minutes each.
Mr. Perkins, you have the floor.
Thank you, Mr. Chair.
Thank you, witness, for coming.
You oversaw the seed fund, which the Auditor General found was essentially illegal and outside of the contribution agreements, in other words, the fence posts that the government set up that allowed the spending of taxpayer dollars at SDTC.
Who created the seed fund? Whose idea was it?
The seed fund was a funding stream that was established in 2019. The strategic direction for the foundation was set by the board, and then the funding stream was established under that direction.
Thank you.
The board set it up and the board members selected, as the screening mechanism for a lot of those projects, companies they either sat on the board of or they chaired, like the Verschuren Centre. Is that correct?
As I mentioned in my opening remarks, there were approximately 85 different partners that SDTC worked with, so those partners would nominate companies for funding and then those nominations would go through an eligibility screening process.
A nomination—
I've read the documents. That wasn't my question. My question was that you had accelerators set up to review these things. Did you not, like the Verschuren Centre?
No, it was staff who would review the projects for eligibility, and then if they met the eligibility criteria that were set up for the seed funding stream, the companies would then go forward to a panel of experts that would review them. Then the recommendations would be made to the project review committee. The project review committee would then recommend projects to the board of directors.
You worked then in parallel with the current acting COO—whatever they're calling him—Ziyad, the former VP of investment.
Right. When the consideration was being put forward for $6.8 million for the Verschuren Centre from the board, there were a number of emails from him to the team, which I think includes you, fast-tracking their application.
In fact, on July 30, 2021, the subject says, “Verschuren Centre request to fast-track proposal”.
Who would have told him to fast-track that proposal?
I guess your question is who would have told him to fast-track. I'm trying to remember because I know Ziyad addressed this at the committee before. There are about six steps in the application process. A fast-track would be that the information collected on the project was sufficient, and they didn't need to gather additional information on the project. It doesn't necessarily mean—
That would be the decision of the vice-president, investment, who would agree to fast-track it, but it doesn't necessarily mean the project moves faster through the approval process. It just means that there's sufficient information to proceed to the next step.
Okay. Fair enough. The Verschuren Centre was turned down for obvious conflicts of interest. It's shocking to me that it ever made it anywhere, even through a consideration process. It was turned down, but the same vice-president, in a letter in January 2022, said that they would use staff at SDTC to find money elsewhere in the government.
Do you think it was the right thing for the employees of SDTC to essentially be the business development arm finding government money for a centre that was set up by the chair of the board?
It's my understanding that the Verschuren Centre asked SDTC to not support them in finding any additional funding streams after their project was denied at SDTC—
But that's not what happened. That's not what happened. According to the vice-president of investment, yes, they did, in fact, help find them almost $11 million.
Was that a regular occurrence, where board member companies were using or helped by staff to find other government funding for their projects?
As I mentioned in my opening remarks, I worked with a team of ecosystem leads. Their mandate was to support the company in accessing—
It's a simple yes or no. I don't need a repeat of your opening remarks.
It's yes or no. Did board member companies—those that they had investments in—regularly use the staff of SDTC to find other government money for their companies, yes or no?
What I was trying to answer is that the team at SDTC always put support for companies as the primary focus of the work they did. If that meant a company was not a fit for SDTC's mandate, they would make recommendations, based on their knowledge of the ecosystem, of other places where companies could go to receive funding.
That was part of the work that the ecosystems team would do.
Thank you very much. That is your time, Mr. Perkins.
Next is Ms. Yip.
You have the floor for six minutes, please.
Thank you, Chair.
Thank you, Ms. Kolbuc, for coming today.
How many employees were you responsible for on your team?
It was if I took on additional responsibilities or if we recruited additional people to support the work the foundation was doing. I was there for eight years, so over time there were different structures.
Some of the feedback I would get from my team is that often I have a genuine caring for the people within my team.
I would describe my leadership style as very empathetic, kind and supportive, as well as high performing. I would always have high expectations for the team that I led, but would certainly want to ensure that they had the support they needed to achieve the goals they had in front of them. I'm very clear in my communication to them. I'm accessible, should they need to speak with me.
Those would be attributes of my leadership style that I always held in every leadership role I've been given.
I take note of the qualities you've just mentioned, but it's also noted by many employees that there was significant staff turnover during the tenure of Leah Lawrence as president and CEO.
Would you say that this is accurate?
What I would say is that in any organization there is turnover. The foundation did track those turnover rates. They were within the industry averages.
I also believe that there was a review of retention rates within the McCarthy Tétrault report. I seem to recall that I read that. It was deemed to be within an acceptable or normal range of turnover.
In your opening statement, you said you were surprised and saddened by the allegations from former staff or staff.
It was very sad to hear the allegations brought forward because I've always strived to foster an inclusive and supportive workplace and to ensure that everyone's voices are heard and that people feel respected. The allegations are very much not in line with the values that I have as a leader.
How would you compare your view of your leadership style with statements from multiple former employees saying that SDTC had a toxic culture and workplace environment during the tenure of Leah Lawrence as president and CEO?
I would not say that it was the experience. I would just ask you to look at.... There was a very thorough and comprehensive report of all of the allegations that were brought forward. The conclusions of that report say that it was a view of a minority of people.
These same former employees have alleged incidents of verbal abuse and public shouting. How do you respond to these claims?
I do not shout. I do not shout at my children in my home. I do not shout at my employees at the workplace. The voice, the tone and the tenor that I'm using with you today is consistent with how I operate in a professional environment as well.
A former project manager at SDTC stated that, “Nothing about working with, in or around this organization gives me the confidence that the individuals in management would admit to problems if they were found.”
Why would a former employee so publicly criticize the organization like this?
I'm not certain why a former employee made those statements, but what I can say is that the employee, along with all employees at SDTC and all former employees, were invited to fully participate in the review of HR practices that was commissioned by the Minister of Innovation and Science, supported by the Department of Justice. People were invited to speak freely in that review, and the conclusions on those matters are contained in those reports that are on the public record.
There are also claims that employees experienced a hostile work environment under your leadership. Were you aware of any concerns raised by staff about workplace culture?
I became aware—just give me a minute here, please—of the allegations against me when I began receiving anonymous emails, fraudulent emails that had been established in my name, that contained many of the allegations that you are quoting today. That was how I was first informed of the allegations made against me. It was very upsetting for me. I have never had anyone take my name and create anonymous emails to communicate broadly and publicly all of these allegations.
I'm going to take a minute.
Ms. Yip, I'm afraid that is your time. I was going to ask the same thing of the witness.
Ms. Kolbuc, take a second.
The next member will be asking questions in French. I just want to double-check and make sure you have the interpretation turned on.
That's good. Thank you very much.
[Translation]
Ms. Sinclair‑Desgagné, you have the floor for six minutes.
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?
[English]
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—
[Translation]
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?
[English]
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—
[Translation]
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?
[English]
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.
[Translation]
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.
[English]
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—
[Translation]
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.
[English]
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.
[Translation]
Thank you, Ms. Sinclair‑Desgagné.
[English]
Next is Mr. Cannings for six minutes, please. You have the floor.
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?
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.
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?
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.
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.
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.
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?
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.
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.
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?
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.
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?
When you're at these committees, there are many questions coming at you. You're trying to remember quite an expanded period of time. Based on that email you shared, the offer would have been made, but on whether or not the offer was accepted, it's my recollection that it was not accepted for SDTC to provide support to that centre.
On what basis do you draw that recollection? Was there a letter? What communications were there with the Verschuren Centre, and with whom? What do you have to substantiate that? It's completely inconsistent with what we've heard.
Yes, I can look and see what I can do to further substantiate that and follow up with the committee with that information.
It also contradicts the testimony of the whistle-blower, who stated that unprecedented efforts were made to help secure funding for the Verschuren Centre. Are you stating to this committee that the whistle-blower misled or flat out lied to this committee? Is that your position?
My goal at this committee is to ensure that I provide fulsome responses to the questions I'm being asked, based on my recollection of what happened at the time, because I know this matter is of utmost interest to this committee. I want to ensure that I fulfill my duty and role in responding to all of the questions that you are putting forward with the most fulsome answers that I can.
Thank you for that.
I want to go back to a question that Mr. Perkins posed to you. How often did SDTC staff assist board members, companies or projects in which board members had interests in to secure funding from other government departments and agencies, as Mr. Rahme offered to do on behalf of the Verschuren Centre?
How often did that happen?
I was never contacted by any board member about a project that was being considered for funding.
What I did provide in my response to your colleague was that my employees and the staff at SDTC did work within that whole-of-government approach to provide support for clean technology companies. We would make referrals to other funding agencies, other programs and provincial partners where we thought—
I'm sorry to interrupt. Those referrals happened in certain instances where board members had conflicts. They were board members' companies. They had interests in those companies. SDTC staff, you're confirming, did assist projects where there were those types of conflicts. Is that correct?
I'm based in Calgary, Alberta, so oftentimes there might be an applicant who was looking for funding, and the project they had could have been a better fit for a program under Natural Resources Canada, so we would make a referral to them—
I understand in general, but I'm asking just a very specific question. I would like an answer, yes or no, with the greatest respect—
Mr. Cooper, that is your time. We will come back to you, I am sure.
Ms. Khalid, you are next, please. For five minutes, you have the floor.
Thank you very much, Chair.
Thank you, Ms. Kolbuc, for appearing here today.
I'll start by asking this: Do you currently make any political donations to any political party?
I was a member of a political party in the past. As was mentioned in this committee, I used to work as a political staffer under former premier Ralph Klein, and was active in provincial politics for a number of years early in my career.
At the time, it was the Progressive Conservative Party of Alberta, but I have been involved in federal Conservative politics as well.
[Translation]
[English]
I have a point of order, and I've paused the clock.
[Translation]
The floor is yours, Ms. Sinclair‑Desgagné.
I have doubts about the relevance of my colleague's questions. I understand that things are very partisan here on the committee, but it is actually supposed to be non-partisan. I think there is enough material about Sustainable Development Technology Canada, particularly concerning Ms. Kolbuc, that we could get back to more relevant questions.
As you know, I allow committee members exceptional latitude here. Ms. Khalid may therefore continue.
[English]
Ms. Khalid, you have the floor. You have four minutes remaining.
I haven't been involved actively in federal Conservative politics recently, but I was on constituency association boards many years ago supporting politicians. I was a big supporter of the late honourable Jim Prentice. He was an honourable man whom I'm very proud to have known.
Thank you very much for sharing that.
In your testimony, you talked about eligibility requirements being reviewed by staff.
Who overlooked that staff, and what were the criteria and the management policies around it?
There would have been a director who would oversee the staff who were ensuring that the seed funding companies met the eligibility criteria that we had in place. I'm sorry that I don't have a list of all of the eligibility criteria, but I can speak to them at a level. Determining that the project had the potential to deliver an environmental benefit, which is a very important part of our mandate—
I'm sorry. I'll stop you there and would request that you perhaps submit that list to us in writing. We'd really appreciate that.
With respect to any of the eligibility criteria, were any ministers involved in that decision-making?
With respect specifically to these applications, what safeguards were in place at SDTC to prevent conflicts of interest during your leadership specifically?
Every month, a full list of all companies that SDTC was funding was sent out to all staff members. Staff members were required to review that list and to declare any potential perceived or real conflicts of interest that they had, and then those conflicts would be managed appropriately.
According to the RCGT report, deliberations and conclusions about conflicts were not documented prior to 2023. Why was that, and have you ever worked for an organization that didn't have that kind of documented process?
The Auditor General and RCGT highlighted some gaps within the conflict of interest policies that SDTC had. There were a number of recommendations that were put forward. All of those recommendations have been accepted and have been put in place.
The ultimate responsibility for the management of conflict of interest was under the former CEO of Sustainable Development Technology Canada.
Thank you.
Who do you think should be responsible for making sure that these are properly documented? Clearly, it wasn't a priority for you or your CEO at the time, but do you think that it should be a priority? What would you suggest as a mechanism to make sure that we're taking our taxpayer dollars very seriously in terms of how they're being allocated?
One of the ways SDTC strengthened its conflict of interest practices was to hire an independent ethics adviser. That independent ethics adviser is available for staff as well as for board members to be able to disclose conflicts and to adjudicate conflicts.
As well, there is a registry of all the conflicts, maintained and available publicly, for all staff. I think that's a really important recommendation that was implemented. It certainly would have been very helpful if we'd had that previously.
Thank you, Mr. Chair.
Ms. Kolbuc, I am going to continue in the same vein as my previous questions.
The Department of Innovation, Science and Industry says there were several warnings regarding the fact that the fund was not compatible with the seed stream and the ecosystem stream under the terms of the contribution agreement. In fact, that is stated in the auditor general's report.
You were the director; you selected the projects to fund. How can you explain the fact that you simply decided to ignore the reservations stated by the Department of Innovation, Science and Industry, even though it is your funder?
[English]
I always believed that SDTC was operating within the confines of our mandate and the agreement. We did have regular discussions and reporting of our work with department officials. Decisions related to project funding were made by the former board of directors.
I always believed that, but I also acknowledge that the Auditor General has come to a different conclusion and accept all of the recommendations—
[Translation]
Right. Thank you.
Are you telling me that you were not aware of the reservations that the Department of Innovation, Science and Industry submitted to Sustainable Development Technology Canada concerning the fund of which you were the director? Were you never informed of the reservations stated by the Department of Innovation, Science and Industry?
[English]
[Translation]
I am not talking about the minister directly, but the Department of Innovation, Science and Industry.
I imagine you have read the auditor general's report. Since my speaking time is limited, I do not need you to reread the paragraph that clearly and categorically states that the Department of Innovation, Science and Industry had raised doubts regarding non-compliance with the contribution agreement in connection with the fund of which you were the director.
Are you telling me, and this is the question I have already asked you, that you were not aware of those reservations on the part of the department?
[English]
I had regular discussions with officials within the Department of Innovation. Any concerns they had I would have addressed and felt that they were addressed in my discussions with them. These projects were publicly reported on—
[Translation]
[English]
[Translation]
So you are not familiar with the mandate of Sustainable Development Technology Canada. If you were familiar with the contribution agreement, you would know that project submissions have to be public. People have to be able to find out how to make an application online, and that was not the case for the seed stream of the fund or the ecosystem stream of the fund, I believe. You should have known that there were conflict of interest policies. Instead, you pointed me at the board of directors.
You had conflict of interest cases in front of your face and you did not report the right information to the project review committee. For example, the fact that Chris Wormald both had a stake and was receiving funds from Sustainable Development Technology Canada as an external consultant was a conflict of interest of which you did not inform the board. In addition, the contribution agreement was not followed.
Ms. Kolbuc, it would seem that there are things that are not working, and you are still in the position, which is actually surprising. Could I get an explanation, please?
[English]
I was going to say that this was more of a statement.
[Translation]
Ms. Kolbuc, do you have any comments?
[English]
I'm sure Madame Sinclair-Desgagné will pick it up again on her next turn.
Mr. Cannings, you have the floor for two and a half minutes, please.
Thank you.
Ms. Kolbuc, as you stated in your opening remarks and as has been brought up several times during these questions, there have been some fairly serious complaints, I would say, about your—let's say—management style in dealing with employees. You said this was thoroughly investigated and that the report is in the public record. For one thing, can you just remind me and the rest of us here what the findings were of that report?
Do you want me to just read to you the final conclusions from the report? Would that be helpful? Is that what you are looking for?
It says:
Current or former executives did not engage in the type of repetitive, vexatious or major incident conduct that would constitute harassment, bullying or workplace violence under applicable standards. The assertion that there was a “toxic workplace” was a minority view among participants and appears to be largely attributable to animosity towards leadership style and disagreement with management decisions, organizational changes and conflict of interest issues.
Decisions about restructuring or terminations were not made using discriminatory criteria, nor were they arbitrary and lacking reasonable business justification.
Severance packages were within market expectations and NDA terms and use were in keeping with customary employment practices.
There are a couple more. I can keep going.
That's okay.
You mentioned that one of the issues that sparked some of these bits of animosity seemed to be conflict of interest issues. Was that a recurring issue in your office?
As I said, the majority of the allegations that have been made about me personally, I first became aware of when I started to receive these anonymous emails. Just give me a minute. I find this difficult to speak about. They were composed in my name and included a number of them.
I certainly would have worked, as I do as a leader, to resolve these matters had they been raised. I certainly acknowledge that there were opportunities to improve the conflict of interest practices at SDTC. I've certainly learned a lot, and I always did my best to conduct myself with high ethical standards.
You left some time on the table. Do you want to continue your line of questioning? Okay. Thank you.
Up next is Mr. McCauley for five minutes, please.
Thank you, Mr. Chair.
Witness, thank you for joining us. It's nice to see someone from Alberta, even if you are from Calgary.
Were you aware of these conflicts that were going on? It was systemic. It wasn't like one or two that governance missed. This was widespread systemic fraud being committed. You were a vice-president, so at a high level. Were you aware of any of these?
In my role as the vice-president of ecosystems, I always did my best to manage these conflicts of interest and to ensure that the stewardship of public funds was done in the best way possible. I have to say—
Were you aware that in the contribution agreement it was required that the foundation report conflicts or perceived conflicts to the minister?
Yes, I was aware of that. It was my understanding that there was a departmental liaison who had access to the board materials, including the minutes, and the conflicts would have been—
Let me just ask again. You were aware that they were required to be reported to the minister. Did you ever follow up on any of those to ensure that these conflicts were addressed?
I appreciate the question from the honourable member. It was not my responsibility to report those conflicts.
I'm sorry, but you were a vice-president—and probably a well-compensated vice-president—in the public service, and you didn't believe it was your job to report these. We had a whistle-blower, and I'm sure you've read the testimony, because you reported on it. He was not a high-level senior executive like yourself, but he had the bravery to come forward to try to stop this fraud.
Didn't you, as the vice-president, see it as your responsibility to follow up on this? Help me out here.
It was my understanding these conflicts were reported into the department by us providing them with copies of the minutes of the board meetings and the materials from the board meetings.
This fraud went on for years. You just turned a blind eye. You were aware. You said, “Okay, we reported it through the minutes,” but it continued for years. It was $400 million stolen from taxpayers, yet, as the vice-president, you did your job by sending along an email or sending along minutes and then walking away. I'm just flabbergasted how this could happen.
I guess I don't have an answer.
I'm flabbergasted. How did you allow that to happen? In what world does a vice-president—a well-paid, well-compensated and well-pensioned vice-president—not take any responsibility when taxpayers' money is being defrauded? I could see a one-off. If it happened once, okay—“I saw the minutes went up the line”—but this went on for years. Millions were stolen for years, and you were aware and you were a vice-president, but it was a shrug.
Sir, I don't think I'm going to get a response.
I'm going to turn my final minute over to Ms. Sinclair-Desgagné.
[Translation]
Ms. Kolbuc, I am going to give you another opportunity to answer the question and I am going to continue on from what my colleague Mr. McCauley was saying.
You not only did not report the conflict of interest cases to the board of directors or the department, but you were part of it, since it was you yourself who retained Mr. Wormald to assess the applications he had authored himself.
My question is very clear. Do you understand that this is a conflict of interest, yes or no?
[English]
[Translation]
[English]
Yes, I would have familiarized myself with the conflict of interest policy upon joining the organization.
[Translation]
It seems that before the auditor general's report, you did not understand what a conflict of interest was, even though you had had training. It seemed to you that it was reasonable for a person to author an application to Sustainable Development Technology Canada and then be retained by the same organization to review the application. Does that seem reasonable to you?
Not to report that kind of conduct to the board of directors, to have it approve the project without knowing there was a gigantic conflict of interest, does that seem reasonable to you?
[English]
I am going to have to say all of these matters were thoroughly reviewed by the Auditor General's office. They made a number of recommendations to strengthen the conflict of interest practices at SDTC. The foundation has accepted all of those recommendations, and I'm certainly following the policies and practices that are in place.
Thank you, Mr. Chair.
Ms. Kolbuc, ordinarily, CEOs participate at board meetings, of course. In your case, were you often asked to participate at board meetings?
[English]
From time to time, I would be invited into board meetings to observe or, if there was a specific matter I needed to present on, I would present on that matter.
[Translation]
Right.
Earlier, you were asked questions about the conflict of interest policy. Once a conflict of interest was declared by a board member, what was the organization's directive? What was your role? Did knowing that there was a conflict of interest change how things were done, or did you continue with the same practices, regardless of what had happened?
[English]
We would always strive to manage the conflicts of interest, should we become aware of them. As I have mentioned, there were clearly gaps in the policies and procedures SDTC had in place to manage conflicts of interest.
I think the addition of an independent ethics adviser is a valued change within the foundation's mandate and within the foundation's organization. I think that person provides valuable expertise that was lacking before.
[Translation]
There have been several conflicts of interest in the organization. Have you received additional payments from a company or anywhere else after a decision to approve funding was made?
[English]
[Translation]
Right.
Mr. Chair, I am going to use the rest of my speaking time to move the following motion.
Given that,
The committee has held 15 meetings on its study of Report 6, Sustainable Development Technology Canada, totalling over 46 hours with 33 witnesses;
The Auditor General of Canada and the Conflict of Interest and Ethics Commissioner have both conducted investigations and issued reports on the matter;
Two internal investigations from Raymond Chabot Grant Thornton and McCarthy Tétrault have been conducted and completed;
That, notwithstanding any previous decision of the committee,
a. The committee agrees to conduct one more meeting, November 27, 2024, on Report 6, Sustainable Development Technology Canada to hear from remaining witnesses;
b. that priority be given to the witnesses named in the motion adopted unanimously November 4, 2024;
At the conclusion of witness testimony conducted during the meeting on November 27, 2024, the committee provide drafting instructions to the analysts on the final report of the study; and
d. That no more meetings be conducted on Report 6, Sustainable Development Technology Canada.
Mr. Chair, before you ask, I would inform you that the motion has been sent to you.
All right. I'm going to just have the clerk....
Hold on. I have a list here.
Ms. Yip, you're at the top. I also have Mr. Nater, Mr. Cooper and Mr. Perkins.
I'm going to have the clerk—
Very good.
I'm going to suspend for just a minute or two.
Ms. Kolbuc, hang tight. If you want to stretch your legs or get up, you can. We're going to be a couple of minutes here. I usually take the temperature of the room to see how long this is going to last, but for now, if you want to get up for a couple of minutes, that's no problem.
I call this meeting back into order.
You have all received Mr. Drouin's motion in both official languages.
Mr. Drouin, before I turn the floor back to you, would it be helpful for me to tell you and the floor what I have lined up for Wednesday already and how it aligns with your motion, or would you like to take the floor? You have the floor either way.
I will inform and bring the members up to speed.
First, Mr. Drouin's motion is certainly in order. With regard to the witnesses referenced in the motion, we've heard from one already. I have scheduled Mr. Andrew Noseworthy and Mr. Douglas McConnachie for Wednesday. The fourth witness, Leah Lawrence, is not available at all. We're not able to secure contact information for her.
That's right. Pardon me. Thank you for that.
We have contacted her. She is studying in the United States and has declined our invitation to appear. I was going to bring this up at the subcommittee meeting that we'll have next week, but you now have it before you.
With that, Mr. Drouin, you have the floor.
Thanks so much, Chair.
The goal of this motion, just quickly, is that next week, as you've highlighted, we have other Auditor General reports that are coming down the pipe. I think this committee has done a tremendous job, but we also need time for this committee to make recommendations back to the House. I know you won't get to table that, if we continue on, before springtime, understanding that there are other Auditor General reports that will be important for us to look at.
That's where I will stop with my rationale for the motion.
Thank you.
I have a list of members. I'll just read it off, because I think it will probably occupy a good chunk of time. I have Ms. Yip, Mr. Nater, Mr. Cooper, Mr. Perkins, Ms. Khalid and Madame Sinclair-Desgagné.
Ms. Yip, you have the floor.
Order.
I will call the vote on the motion to move our committee in camera.
(Motion agreed to: yeas 6; nays 4)
The Chair: Ms. Kolbuc, you are excused. Thank you very much for your time. I understand that you will return to us in writing with regard to some questions. You can work with the clerk on that. Again, you are excused. Thank you very much.
I will now suspend this meeting. We'll come back, for the members in question, to an in camera meeting.
This meeting is suspended.
[Proceedings continue in camera]
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