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Ontario Minister of Economic Development Vic Fedeli gives remarks during a press conference in Brampton, Ont., on Feb. 15. Fedeli said Thursday that the company formally known as Facedrive Inc. received $2.1-million of the grant from the Ontario Together Fund.Christopher Katsarov/The Canadian Press

Ontario’s Economic Development Minister says a company that has been accused by the Ontario Securities Commission of issuing misleading press releases about its COVID-19 contact-tracing bracelets received more than $2-million in government funding because it “continued to meet their metrics” laid out by the ministry.

The company, formerly known as Facedrive Inc., secured a $2.5-million grant from the Ontario government in February, 2021, to help develop bracelets with new technology used for physical distancing and contact tracing during the first years of the COVID-19 pandemic.

Vic Fedeli, Minister of Economic Development, Job Creation and Trade, said on Thursday that the company received $2.1-million of the grant but not the last $400,000 “because that’s the point where they stopped meeting their metrics.” He said metrics were measured in job numbers and growth, as well as production levels and company investments.

“They met their metrics all the way through; they delivered exactly what they told us they would deliver and up until the end. So we had no reason to doubt any of the numbers,” Mr. Fedeli said in an interview.

“But once they stopped meeting their deliverables to us, we stopped writing the cheques.”

The $2.5-million grant money was part of the $100-million Ontario Together Fund, which provided funding to companies and organizations for projects that “strengthen the resilience of Ontario’s health care sector, COVID-19 response or pandemic preparedness.” The money was intended for companies that strengthened Ontario’s manufacturing capacity or supported homegrown technologies or innovation.

Mr. Fedeli said the government will now conduct a complete audit of the program to “look back and track all of the recipients.”

“The whole idea of the Ontario Together Fund is to invest in companies during COVID with new ideas. We had a tremendous amount of success in this program. A lot of new innovations. Thousands of jobs were created with this program,” he said.

“We would have hoped that every company would have met all of their metrics, but they all can’t. ... This is taxpayers’ money. It’s invested very diligently.”

The OSC said in a statement of allegations dated April 5 that Facedrive Inc., which has since rebranded as Steer Technologies Inc., issued contradictory and misleading news releases about the capabilities and readiness of the technology, known as TraceSCAN. The company also failed to correct information about the anticipated release of certain features after it was clear the timeline was inaccurate, according to the OSC.

The securities commission levelled accusations against Steer chief executive Suman Pushparajah, chairman Junaid Razvi, and former CEO and chair Sayan Navaratnam, saying they failed to take adequate steps to ensure the news releases were accurate.

The company and the three executives reached a settlement with OSC staff on Wednesday. A hearing is scheduled on May 19 for the commission’s Capital Markets Tribunal to determine whether to approve the agreement. Spokespeople for Steer did not respond to requests for comment on Thursday.

The contact-tracing bracelets were also pushed by the Laborers’ International Union of North America (LiUNA), which partnered with the company on a pilot project for the TraceSCAN app in August, 2020. Victoria Mancinelli, LiUNA’s director of public relations, said on Thursday that the union did not invest in the company.

“We explored the possibility of a pilot project to better understand the potential use of contact-tracing technology to enhance health and safety at the onset of COVID-19, as health and safety remains our highest priority. Due to logistics surrounding on-site implementation, it did not take off beyond exploring a pilot,” Ms. Mancinelli said.

The OSC alleges that between April, 2020, and January, 2021, the company issued several news releases that “created confusion or a misleading impression” about TraceSCAN. Some announcements suggested TraceSCAN was a consumer-ready product, when in fact the company had only developed a prototype, according to the OSC.

Another release contained misleading information about the benefits of TraceSCAN, neglecting to mention that in order to be useful to the public, the device would have to interact with other contact-tracing devices – which it could not do – or be supported by the government to encourage adoption. Yet another announcement boasted of features that had not been developed or tested.

The TraceSCAN bracelets were intended to alert wearers who were standing too close to one another according to public-health guidelines at the time, and collect data for contact tracing. The government said the device would be manufactured locally, but The Globe and Mail later reported that the company purchased completed hardware from China.

Former Facedrive CEO embroiled in lawsuits alleging real estate fraud

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