:
I call this meeting to order.
[Translation]
Welcome to the 69th meeting of the House of Commons Standing Committee on Public Accounts.
[English]
Pursuant to Standing Order 108(2) and the motion adopted by the committee on Monday, April 24, 2023, the committee resumes its study of the Pierre Elliott Trudeau Foundation.
I'd now like to welcome our witness. From the Pierre Elliott Trudeau Foundation, we have Mr. Edward Johnson, chair of the board of directors.
Thank you for joining us today.
Mr. Johnson, before I give you your five minutes, I think I have a....
Yes, go ahead, Ms. Sinclair-Desgagné.
:
Thank you, Chairman. I'll try to stay within that constraint.
The Pierre Elliott Trudeau Foundation is a non-partisan charitable scholarship foundation that was created in 2002 with broad cross-party support in the House of Commons. The first board of directors included Bill Davis, Roy Romanow and Peter Lougheed. It was granted a $125-million endowment by the government.
Since then, it has spent some $95 million on programs, plus approximately another $20 million to $25 million on delivering those programs, on the administrative side. In total, that's an amount that's pretty close to the original endowment. During that time, we have provided 295 doctoral scholarships, plus mentorships and fellowships—88 fellowships and 163 mentorships. We achieved that without touching the capital, which now stands at $145 million. We have not asked for a cent of new money from the government in 21 years.
Today we rank up there with Rhodes, MacArthur and Fulbright as a sought-after scholarship. Many of our scholars say their involvement was life changing.
Our directors and members are all volunteers. The Trudeau family has no financial interest whatsoever in the foundation.
The foundation, over the past 21 years, is doing what it was supposed to do with the taxpayers' money. In tight compliance with our funding agreement, we deliver a very simple, four-point program: scholarships, mentorships, fellowships and a public interaction program. We are meant to make a significant contribution to the future of Canada, and we have delivered to the letter.
The foundation has been subjected to unwarranted and unfair attacks, which began in late February, revolving around a donation totalling $140,000 from a Chinese Canadian entity. These put huge pressure on the board of directors. In this context, let me note on record for this committee that we were never offered $1 million, and we never received any red flags from CSIS.
It's important that I respond to some earlier testimony by our former president and three former directors at the House ethics committee.
At no time did any director receive a legal opinion that they were in a conflict of interest involving the 2014 to 2017 Chinese donation.
In my case, I didn't need a legal opinion to tell me what I instinctively knew. I was on the board at the time of those donations, so I should not be involved in the oversight of any outside review of them, although my potential conflict of interest might have been purely perceived, not legal. At no time did I resist or attempt to narrow such an independent review.
Indeed, within 10 days of the first news story, I urged that we needed an independent review and that it should be overseen not by management and not by me, but by a special committee of three directors who had had no involvement whatsoever in the foundation in the years 2014 to 2017. I phoned every board member individually in mid-March and discussed this. On March 24, I remarked to our lawyers how supportive our directors were of our president and me in the trying circumstances of intense national attention.
I proposed oversight by an independent committee at the full board meeting on March 31. As to my eligibility to chair that meeting, there is no doubt that my interests aligned perfectly with the interests of the foundation. I wanted an independent review and so did the rest of the board. It was my duty, as chair, to preside.
There were two outside lawyers from two firms advising the board at that meeting. Both said that they had not given opinions on conflicts of interest. Neither they nor any director questioned my legitimacy to chair or to vote at that meeting. At no point was there a motion for any directors to recuse themselves, nor was there any refusal to do so by any director.
Over the subsequent week, by Easter Thursday, a consensus emerged among most directors, in my view, that indeed the outside review should be overseen by a special committee of three, as I had originally recommended, and that the review should not report to management. To my utter surprise and disappointment, the board resigned on Easter Monday—April 10.
Knowing that those resignations would stall any outside review for weeks, I wrote the Auditor General on April 14, three days after the board resignations, to ask her to investigate all aspects of the receipt and handling of these donations by the foundation.
Finally, for our scholars, mentors and fellows, I want to say a special word to them and to our marvellous team at the foundation and to our community. Looking ahead, the Pierre Elliot Trudeau Foundation will continue to provide its outstanding academic program. Thanks to the volunteers on our finance committee, we continue to be well financed. Our excellent team is working ahead on the announcement of our next cohort and planned leadership development events.
It's an exciting future heading into our 23rd year.
Thank you.
My apologies for the alarm—that was not my intention—but I have a new stopwatch. I'm going to endeavour to fix that so I don't interrupt. MPs know that I will stop them when the buzzer goes, but I will allow the witness to finish answering the question.
Colleagues, my attempt this morning is to get through three or four rounds, so I will be watching the clock particularly closely. That takes us to just under the hour and 15 minutes that we have scheduled.
Without further ado, Mr. Brock, welcome to committee.
You have the floor, for six minutes, please.
If you'll allow me, I can read a relatively short email, which was in response to your questions.
There's a recital at the beginning to the clerk of the committee.
Please find below the information requested:
On March 1, 2023, upon the initiative of the President and CEO Pascale Fournier and with the approval of the Board's Executive Committee, the Foundation sent a cheque in the amount of $140,000 to reimburse the donation that had been received by the Foundation in two $70,000 tranches in 2016 and 2017. The cheque was signed by directors Bruce McNiven and Peter Sahlas, drawn to the order of Millennium Golden Eagle International (Canada), the Canadian corporation that made the donations, and sent via Canada Post....
I'm going to summarize because I know you're time is limited. I'll just whip through some of these paragraphs.
The foundation issued a statement the same day declaring that it had been refunded, but on March 21, 2023, after three failed delivery attempts, Canada Post returned to the foundation the envelope containing the reimbursement cheque.
After the resignation of the president and CEO on April 10, 2023, the directors learned that in early April, the foundation staff reporting to the president had contacted the Bank of Montreal to confirm the origin of the two payments back in 2016 and 2017. The bank confirmed on April 23 that both payments were received by electronic transfer from the Canadian corporate entity listed on the CRA receipts that had been issued by the foundation, and that the two payments originated from its Montreal—that is the donor's—bank account, which was still open in 2023 and in good standing.
This information had never been provided to the board, which had recently been led to believe that one of the two $70,000 payments may have originated in China and that the foundation's CRA receipts may have been improperly issued.
On April 12, 2023, the $140,000 cheque that had been returned to the foundation by Canada Post was delivered directly to the donor's downtown Montreal branch of the Bank of Montreal. The cheque was provided to the donor's account manager at the branch, who deposited the cheque immediately and confirmed the deposit in writing.
The foundation is taking the appropriate steps with the CRA in regard to the above. The CRA receipts that were issued in 2016 and 2017 were both issued to the same Canadian corporation, Millennium Golden Eagle International (Canada). The first receipt was addressed overseas and the second receipt, approximately one year later, was addressed to the corporation's Canadian address.
Did you receive any confirmation—
Mr. Edward Johnson: Yes.
Mr. Larry Brock: —from Millennium—
Mr. Edward Johnson: It wasn't from Millennium.
Mr. Larry Brock: —upon receipt?
I'm sorry. Could we talk one at a time, sir?
Mr. Edward Johnson: I'm sorry.
Mr. Larry Brock: Did you receive a receipt or some type of acknowledgement from Millennium that they, in fact, received $140,000 directly into their bank account?
Its mandate was to essentially do what we're doing today, which is to provide a four-element program: scholarships, mentorships, fellowships and public interaction programs. We were to provide our scholarships as doctoral scholarships in the social sciences and humanities. The reasoning at the time was.... I believe it remains even more true today—we are awash in doctoral scholarships in the fields of applied science, technology, engineering and so on. However, what's lacking is adequate support in the social sciences and humanities, which are, arguably, the backbone of a democratic society and an advanced society: studying human rights, civil liberties, foreign policy and Canada's place in the world. These issues don't get studied in technology school.
That was the rationale behind it and essentially our program. Where's the value added? Why is a Trudeau scholarship different from any other? The big element is our leadership program, which takes scholars out of their comfort zone and introduces them, through mentors, fellows and other people, to aspects of Canada and the world that they would not otherwise be introduced to. We call that “engaged leadership”. We believe that adds a certain value to a Trudeau scholarship that isn't necessarily obtained in other cases.
We've done 295 of those scholarships. They're very substantial, very highly regarded and very sought-after. We had many hundreds of applications for a dozen openings last year.
I'd like to thank Mr. Johnson for being here today.
I'll begin with a comment about the context for our study. As you mentioned earlier, we in the Bloc Québécois have nothing against the recipients of scholarships and the potentially honourable principle of awarding scholarships to brilliant students. That's not at all where we're at. It is nevertheless important to specify that a non-profit organization, particularly when it has received funds from the government, has certain governance and transparency duties to the population. That's what my questions will be about.
In your opening statement, Mr. Johnson, you mentioned two gifts of $70,000 each. I believe you said that both receipts were issued to the Millennium Golden Eagle International company in Canada.
:
Good. Thank you. I'll stop you there because my speaking time is limited.
You appear to be well informed about the gift to the University of Montreal. However, when you testified before the Standing Committee on Access to Information, Ethics and Privacy, you didn't appear to have very much information about the $140,000 amount that was gifted by this company to you, the name of which I still hesitate to pronounce because I find it ridiculous. At the very least, I find it surprising that you would not have been aware of that gift, because you were sitting on the audit committee that very year.
According to standard procedure, the audit committee is responsible for ensuring that the Pierre Elliott Trudeau Foundation demonstrates financial transparency and monitors the independent audit process.
:
It's important to remember the words spoken by the legendary Warren Buffett a few years ago:
[English]
“Audit committees can't audit.”
[Translation]
The role of an audit committee is not to study every expenditure, gift or detail.
It's also worth noting the difference between the role of the management team on the one hand, and that of the board of directors on the other. The management role is to propose measures and implement them. The role of the board of directors is to monitor and approve how things are being done.
The volunteers on the audit team can't be familiar with all the details of every gift in any given year. To my knowledge, that's not done by any organization.
:
Thank you very much, Mr. Chair.
I also want to thank Mr. Johnson for being present with us today.
As I'm sure you're aware...because you've been to several committees at the House of Commons here. I understand you were at privacy and ethics as well maybe four weeks ago now.
Mr. Edward Johnson: Right.
Mr. Blake Desjarlais: Our committee, in correlation with some of the other committees, are taking on the work of trying to find the best way forward to ensure that Canadians have the kind of integrity and trust in the system that is most important to our country, our democracy. I want to attempt to ask you questions that will provide the most information against what is, I understand, a very politicized environment. I want to recognize that very important fact and attempt to find reason and good information from you to try to better the understanding, but mostly to better the attempt of Canadians to understand this in a better way.
Mr. Edward Johnson: Fair enough.
Mr. Blake Desjarlais: Agreed.
At the committee, my colleague from asked you this question:
Would you agree that one of the ways to best provide the most amount of clarity around this—because we've now sat through many witnesses, and I'm not sure we have clarity—would be to be included in a public inquiry, should David Johnston, at the end of his special rapporteur position, present that?
At that time, your response was, “I don't think that would be necessary in order to clear the name of the foundation.”
Do you remember that exchange?
Mr. Edward Johnson: Vaguely, yes.
Mr. Blake Desjarlais: Over a month has passed since that moment. Of course, just recently we found that the special rapporteur did not recommend a public inquiry.
Has your opinion, given the situation that has presented itself across Canada, changed in that matter of fact, in particular around trying to build confidence in Canadians for how important our democracy really is?
:
Yes, you've said that. I've heard that.
Would you agree, however, that...? We received the Auditor General in this committee to ask her the question of whether or not this would take place, whether or not she would investigate. At that time, she told us that it was not within her parliamentary power, so of course it was my motion at that time, which I thought was incumbent upon this committee, to look at other means to do it. The CRA, for example is one of those arms. It is independent. It has the power to look at and take on the kind of information related to this.
Would you agree that the CRA may be an important aspect of this investigation?
:
I think it makes a big difference sir, with all due respect.
It makes a big difference because the committee members presented to you on May 9 a series of red flags that, for someone with your intellect and your business acumen, and the fact that you are a lawyer, the fact that you are the chair of the foundation, should have raised a number of red flags.
I know that you went into that committee, as you went into this committee, talking about “unfair” ungrounded allegations. Well, let's talk about facts.
We're not talking about simple intelligence. We're not talking about simple rumours. We're talking about an intercepted recorded conversation between CSIS and one of the donors, Mr. Bin Zhang, and a Toronto consulate, who was promised as follows. The donor, Mr. Bin Zhang, was told by the Communist Party in Beijing to offer the money in the hopes of influencing the new Liberal leader, , and—surprise, surprise—money flows in, the foundation reaches an agreement with Mr. Zhang and Mr. Gensheng, and within five months, both of those businessmen, those Chinese businessmen—not Canadian businessmen—were granted private access to the newly minted . That didn't raise a red flag to you.
Furthermore, sir, we have a real discrepancy when it comes to the tax receipts.
The first tax receipt I brought to your attention was issued to the Millennium Golden Eagle International Canadian-incorporated company, with an address in Hong Kong, and then Beijing interfered, contacted the foundation, contacted one of your employees and said, “Sorry, wrong address, send it to Beijing.” I told you, sir, that the address that Millennium Golden Eagle International (Canada) Inc. originally gave the foundation was fake. A reporter went to Hong Kong and knocked on the door. They'd never heard of the corporation and they'd never heard of Mr. Bin Zhang or knew Mr. Niu Gensheng.
That didn't raise any red flags to you as the chair of the board either—did it?
I have a couple of points to follow up on what Mr. Brock has laid out. Number one, the story that I did read, and that started the ball rolling on February 28, alleged that a consular official at the Chinese embassy had been in touch with Mr. Zhang in Canada and had instructed him to give a million dollars to the Pierre Elliott Trudeau Foundation. The foundation was never offered a million dollars. The million dollars went to the University of Montreal, so I have difficulty connecting the allegation in that story with the facts. That story has never been confirmed, to my knowledge, by a government official or by CSIS. The amount I want to underline that was actually received by the foundation was $140,000 over two years. The facts don't accord with the allegation.
The use of a Hong Kong address.... If I make a donation to the Red Cross and I'm going to be in Florida at tax time, I ask the Red Cross to send the receipt to me in Florida in a different jurisdiction. That doesn't make a difference. I'm a Canadian. I'm a Canadian taxpayer, and I made the donation. I've always felt that similar logic applies to the case of this particular donation. The donor was a Canadian corporation—Millennium Golden Eagle International (Canada). That's the donor, and the receipt was made out to the name of that Canadian donor. Frankly, the receipt would be of no value to a non-Canadian taxpayer—to an entity that's not paying Canadian taxes.
If I may just add one broader thought taken from 10,000 feet, I am concerned—deeply concerned—to see the receipt of a donation in 2016 being judged by the standards of 2023 vis-à-vis China.
:
It's because the context has changed so much.
The years 2014, 2015, 2016 and 2017 were all material times in connection with this donation. Canadian universities were falling all over themselves to develop relations with China and Canadian corporations, ditto. The Government of Canada, in 2014, I believe the prime minister of the day visited China, as did the president of France and the chancellor of Germany.
The predictions were that China was going to be taking over the world economically by 2045. It was going to pass the gross domestic product of the United States. Canadians were working energetically to develop relations, and then, in the case of Canada, the two Michaels were kidnapped, and the world changed.
Today it's a fundamentally different world, and China appears to have done some very nasty things, some utterly inappropriate things, not only in Canada but in other western democracies. There's a serious threat there that must be dealt with, but that wasn't the case in 2014, 2015, 2016 and 2017.
I understand that Ms. Fournier had some issues with respect to the donation that ultimately led to her resignation. She discovered that the Millennium Golden Eagle International (Canada) Inc. was, in fact, associated with Beijing's China Cultural Industry Association. She also found out that the industry association was communicating with Trudeau Foundation employees about admitting information on a donation tax receipt.
The website of that China Cultural Industry Association says it adheres to the “total leadership” of the China Communist Party and was formed with state approval. It lists Mr. Zhang Bin as its president. As per that association, Millennium Golden Eagle International (Canada) has Bin Zhang as the chairman, and it was created with the approval of Beijing, China.
Knowing what I know now, and what Pascale Fournier knew, about Millennium Golden Eagle, do you agree, sir, given your vast knowledge of corporate law, of corporations in general and of general governance, etc....? Would you agree with me, sir, that Millennium Golden Eagle International is, in fact, a shell company operated by Beijing, China?
It's unfortunate, Mr. Johnson, that it appears your former CEO, Pascale Fournier, is the only one who has a strong level of honesty and ethics. When I listened to and reviewed the evidence of Mr. Rosenberg, he saw the same red flags that Pascale Fournier did and did absolutely nothing about it.
What I want to ask you, sir, though, is that I've looked at some correspondence from Pascale Fournier dated March 25, 2023, to a number of board members—you're listed as the top line in that particular email—and she outlines all of her discoveries line by line, paragraph by paragraph, event after event, literally almost but without using the word “fraud” in terms of her concerns about how you publicly stated this donation was a Canadian donation when it clearly was not. It was foreign from Beijing, China. I think what is concerning me and I want to ask you questions about, sir, is that she asked your legal counsel, the foundation's legal counsel, a number of questions. Who was your legal counsel on March 25, 2023?
:
Thank you very much, Mr. Chair.
I'm returning to what I was talking about earlier.
As you know, the appearance of a conflict of interest is often more harmful than the conflict itself. Several of your colleagues testified before the Standing Committee on Access to Information, Privacy and Ethics, specifically Ms. Fournier, Ms. Adam, and Ms. Redfern, to the effect that they had told you they thought you were in a conflict of interest.
Why should your opinion, as you explained it earlier, take precedence over the opinion of these three women from the foundation?
:
Thank you very much, Chair.
Mr. Johnson, I want to follow up on what I believe is the most important role for parliamentarians at this time. I hope you can indulge me with attempting to empathize with the role that parliamentarians are in when we're seeing this tremendously concerning situation across the country that puts into doubt the credibility of our institutions. That's a real fact. Whether it's true or not, the perception is damaging.
In order for us to clear the air and in order for us to have true trust in these institutions, I believe that a public inquiry under the public inquiries act is important. It would provide for an independent commission that would have the powers that your organization—although it could establish one—wouldn't have, which are the power to subpoena, second documents and do the very things that are contemplated in the public inquiries act. It's why we have a public inquiries act.
If organizations are able to just “independently” audit themselves, the perception doesn't go away. You're going to be back here next year if that happens. Trust me. It's going to be continuous. It's just going to go on and on until we have true trust in the process.
The outcome is important, but the process is equally important as well, which is why I do appreciate your attempt to involve the Auditor General. Of course, that wasn't going to be case. She said she wasn't able to do that. I made a motion here to have the CRA do that. The reality with the CRA is that they have to undergo their own processes. It's up to them as to whether or not they audit that, but it's a recommendation I have and it's the recommendation of this committee.
A public inquiry, I think, would go a long way to restoring not only the public faith that we have in our institutions, but also even in your institution. Wouldn't you agree?
:
Mr. Johnson, I appreciate your coming in today. Thank you. We might see you my way, if you're ever back for one of the meetings with the Atlantic Salmon Federation.
Mr. Edward Johnson: I expect good returns.
The Chair: I will suspend this meeting for a few minutes. We're going to go in camera, and we'll take up a few points up there. I know there are flights. We're going to talk about that right off the bat.
Mr. Johnson, thank you very much.
We will clear the room of people who should not be here; otherwise, you're welcome to stay, and we'll start up in about two to three minutes. Thank you.
[Proceedings continue in camera]