Ethics watchdog to probe conflict-of-interest allegation against SDTC chair

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The federal Ethics Commissioner has opened an investigation into the role of Sustainable Development Technology Canada’s chair in approving pandemic-relief payments to companies in the agency’s portfolio, including one she leads as chief executive.

Annette Verschuren, chair of the board at SDTC, Ottawa’s main funding agency for green technology, told a House of Commons ethics committee hearing last week that she had voted with other directors in favour of making pandemic-relief payments totalling nearly $38-million to SDTC’s stable of companies in 2020 and 2021. Among those was energy-storage developer NRStor Inc., which received $217,000. Although Ms. Verschuren is chair and CEO of NRStor, she did not recuse herself from voting, she acknowledged.

The hearing was in response to allegations of breaches of conflict-of-interest rules and governance at the agency, which had prompted an investigation led by Innovation, Science and Economic Development Canada, the federal department in charge of SDTC.

Interim Conflict of Interest and Ethics Commissioner Konrad von Finckenstein wrote in a letter on Thursday that he is satisfied that an examination of the situation by his office is warranted under the legislation governing public bodies. He said he will issue a report to the Prime Minister when he completes the probe.

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Mr. von Finckenstein’s letter said he had looked into Ms. Verschuren’s role in response to a request from Ontario Conservative MP Michael Barrett, a member of the House ethics committee, who alleged Ms. Verschuren had “used her position as Chair of the Board to influence her fellow directors in reaching a decision with respect to the motion she had moved, which furthered her private interests.”

SDTC spokesperson Janemary Banigan said the organization and Ms. Verschuren had no comment on the commissioner’s examination.

The development adds to growing controversy surrounding the agency, whose grants are seen as key to Canada’s early-stage cleantech industry. On Friday, Leah Lawrence resigned as SDTC’s CEO, saying she had been subjected to “a sustained and malicious campaign to undermine” her leadership, and that this had put her in an untenable position.

On Sunday, a director, Jessica McDonald, resigned from the agency’s board. Ms. Banigan said she did not know the reason, and Ms. McDonald did not respond to a LinkedIn message seeking comment. She was formerly chair at Canada Post, and had been an SDTC director since 2021. Before that, she was a representative on its member council.

In early October, the investigation into SDTC ordered by Innovation, Science and Economic Development Canada produced a report that showed evidence of inappropriate funding and breaches of conflict-of-interest rules. The probe was triggered by allegations made by a whistle-blower group that consisted of current and former employees of the organization.

The report, by Ottawa accounting firm Raymond Chabot Grant Thornton, noted that SDTC had made COVID-19 relief payments to companies in its portfolio. It said these payments were inconsistent with the organization’s contribution agreement with the government, which guides how it invests public money, because the funding didn’t have eligibility requirements, or requirements for monitoring or reporting.

In response to the investigators’ findings, Industry Minister François-Philippe Champagne suspended SDTC’s ability to grant money to cleantech startups until its board completes a series of corrective management, governance and human-resources measures. The Auditor-General, meanwhile, has launched her own investigation.

Both Ms. Verschuren and Ms. Lawrence have disputed the findings of the report.

When grilled by ethics committee members about voting in favour of the pandemic relief, Ms. Verschuren, a former CEO of Home Depot Canada, said the directors “took the position that these COVID-19 payments were broad. It was an operational issue.” She also said she had acted on advice of legal counsel, which she said had led her to believe there was no conflict-of-interest issue because no company received preferential treatment.

She was appointed to her role at SDTC by the government in 2019. She has said she reported her potential conflicts to the minister’s office and SDTC during the vetting process and received clearance from the Ethics Commissioner before joining the board.