Leaders of an embattled federal clean-technology agency pushed back Wednesday against the results of a third-party investigation that led to its funding powers being suspended.
Annette Verschuren, board chair of Sustainable Development Technology Canada (SDTC), told the House of Commons ethics committee that the report’s findings of inappropriate funding and breaches of conflict-of-interest rules by management and board members are inaccurate.
“The result is a report which contains numerous errors, and misrepresentations of our policies and procedures,” Ms. Verschuren said.
The report, conducted by outside accounting firm Raymond Chabot Grant Thornton (RCGT) and released in October, investigated human-resource and spending concerns raised by whistle-blowers earlier this year, finding evidence of lax governance. Ottawa has since suspended the organization’s funding abilities and the federal Auditor-General has launched her own probe.
Leah Lawrence, SDTC’s chief executive officer and president, also defended the federally funded non-profit, which provides funds to small and mid-sized companies in the clean-technology sector.
“Our organization has played by the rules, improved the rules, and achieved results for Canadians. My leaders have acted ethically at all times,” Ms. Lawrence said.
Ms. Verschuren called the allegations made by the group of former employees “false.” She told committee members that a separate review, which SDTC commissioned itself from the law firm Osler, Hoskin & Harcourt LLP, found no evidence to support those concerns. (Osler has also provided SDTC with legal counsel, and a partner at the law firm, Ed Vandenberg, is an SDTC council member.)
Ms. Verschuren said that the RCGT report didn’t reflect important documentation, and also complained that its interviews were much shorter and less exhaustive than the one conducted by Osler.
In an e-mail, Sean Benmor, spokesperson for Innovation, Science and Economic Development Canada (ISED), said that in response to the whistle-blower allegations, the department “hired a reputable firm to conduct a thorough fact-finding exercise,” and that the RCGT report “reflects their conclusions based on their review.”
Much of the question-and-answer session between MPs and SDTC’s leadership revolved around an alleged conflict of interest. It stemmed from Ms. Verschuren’s involvement in deciding to distribute COVID-19 relief payments to all companies in SDTC’s portfolio – including NRStor, an energy-storage company of which she is chief executive officer.
NDP MP Matthew Green pressed Ms. Verschuren on why she had not recused herself from that decision.
“Would you not agree that over $200,000 of COVID funding furthers your own private interest?” Mr. Green asked.
“We took the position that these COVID payments were broad. It was an operational issue,” Ms. Verschuren replied, adding that she was acting on advice from legal counsel, which found there was no conflict-of-interest issue with the distribution of the funds.
NRStor first received startup funding from SDTC before Ms. Verschuren joined the agency, and she said she discussed her relationship with the federal Ethics Commissioner.
At the same committee meeting, a government official denied that the agency’s leaders were close to being fired before the RCGT report was even released.
Douglas McConnachie, an assistant deputy minister with ISED, addressed a recording of conversations between him and the whistle-blower group. The recording, which has been reported on by The Globe and Mail and other media, appears to show the ministry was considering firing the board and management before the final third-party report was released.
Mr. McConnachie told the committee he had been “baited into making these speculative and inappropriate remarks” by the complainant – one of the whistle-blowers – and that this statement was selectively chosen from “over 30 hours of conversation” to create a false impression.
On Monday, Industry Minister François-Philippe Champagne faced questions from committee members, who asked him why he had not yet gone as far as firing SDTC executives. He told them that he worked on the basis of evidence, and cautioned against skipping due process.
After the publication of RCGT’s report, which also found some evidence that the SDTC used funds to finance ineligible projects, Mr. Champagne imposed a series of governance and human-resources practices, ordering the agency to adopt them by Dec. 31. He suspended the SDTC’s ability to grant money to cleantech startups until the corrective measures are complete.
Clean-technology groups have raised concerns about the funding freeze, saying the agency plays a key role in supporting new ventures and is critical if Canada is to hit its target of net-zero emissions by 2050.
With reports from Wendy Stueck