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A non-profit foundation dedicated to the memory of Pierre Elliott Trudeau is returning a large financial gift from a Chinese billionaire after The Globe and Mail reported that the largesse was part of a Beijing-directed influence operation to curry favour with Prime Minister Justin Trudeau.

“The Pierre Elliott Trudeau Foundation has learned in recent days through the media that there was a potential connection between the Chinese government and a 2016 pledge of $200,000 to be received by the Foundation,” President and CEO Pascale Fournier said in a statement on its website.

“We cannot keep any donation that may have been sponsored by a foreign government and would not knowingly do so,” Ms. Fournier said. “In light of these recent allegations, the foundation has refunded to the donor all amounts received with respect to the donation pledge.”

Ms. Fournier said the foundation is returning $140,000 of a $200,000 pledge. The foundation received two payments of $70,000 each but never received the rest of the money, she said.

On the broader issue of Chinese meddling in Canada’s democracy, the Commons procedure and House affairs committee heard testimony on Wednesday from Jody Thomas, national-security adviser to Mr. Trudeau, and other security officials.

Andrew Coyne: CSIS is worried about China interfering in our elections, even if the government isn’t

None of the officials who testified, including Ms. Thomas, would discuss the specifics of Chinese interference in the past two federal elections, saying they are bound to secrecy by the Security of Information Act.

Ms. Thomas, however, expressed concerns that whistleblowers leaked highly classified CSIS documents, viewed by The Globe, about Chinese election-interference tactics. Mr. Trudeau has said that he wants CSIS to find the leakers, who risk prosecution under the Security of Information Act.

“I am not going to comment on information that was inappropriately obtained,” Ms. Thomas said. “The unlawful sharing of information and inappropriate sharing of information, I believe jeopardizes national security.”

But she said a Global News report that China transferred $250,000 through proxies to candidates in the 2019 federal election was false.

The secret and top-secret CSIS documents outline how Beijing directed Chinese students studying in Canada to work as campaign volunteers, and illegally returned portions of donations so donors were not out of pocket after claiming a tax receipt. They also explained how China spread falsehoods on social media and provided undeclared cash donations in the 2021 election.

In addition, the documents lay out how Chinese diplomats and their proxies backed the re-election of Mr. Trudeau’s Liberals – but only to another minority government – and worked to defeat Conservative politicians considered to be unfriendly to Beijing.

The donation to the Trudeau Foundation was in the spotlight when The Globe reported Tuesday that CSIS captured a conversation in 2014 between an unnamed commercial attaché at one of China’s consulates in Canada and billionaire Zhang Bin, political adviser to the government in Beijing and a senior official in China’s network of state promoters around the world.

The pair discussed the federal election that was expected to take place in 2015, and the possibility that the Liberals would defeat Stephen Harper’s Conservatives and form the next government, according to a national-security source. The source said the diplomat instructed Mr. Zhang to donate $1-million to the Trudeau Foundation, and told him the Chinese government would reimburse him for the entire amount.

The Globe is not identifying the source, who risks prosecution under the Security of Information Act.

Mr. Trudeau’s Liberals swept to power in October, 2015 with a majority government. Seven months later, Mr. Zhang attended a Liberal Party fundraiser at the Toronto home of Chinese Business Chamber of Canada chair Benson Wong, where Mr. Trudeau was the guest of honour.

Just weeks after the May fundraiser, the Trudeau Foundation and the University of Montreal announced that Mr. Zhang and another wealthy Chinese businessman, Niu Gensheng, would donate $1-million “to honour the memory and leadership” of Pierre Trudeau, who as prime minister opened diplomatic relations with China in 1970.

Of the $1-million, $200,000 was pledged to the Trudeau Foundation, which provides scholarships, academic fellowships and leadership programs. The two men pledged $750,000 to the University of Montreal’s faculty of law, to fund scholarships, which include grants that help Quebec students visit China. Another $50,000 was supposed to go for a statue of the elder Mr. Trudeau that was never built.

The Prime Minister’s Office said Monday that Justin Trudeau “withdrew his involvement in the affairs of the foundation for the duration of his involvement in federal politics.”

During the committee hearings on Wednesday, Shawn Tupper, the deputy minister of the Department of Public Safety, told MPs that the RCMP is not investigating any allegations of illegal activities during the 2021 election. The Mounties “were aware of the information that was brought forward, they have looked at that information and have concluded that they will not pursue a criminal investigation,” he said.

Ms. Thomas told the House committee that CSIS intelligence cannot always be used for criminal investigations because of the sensitivity of protecting confidential sources and methods of obtaining sensitive information.

“There is a lot that goes into the translation of intelligence into evidence,” she said. “Often the intelligence that CSIS obtains can’t be used for criminal purposes because it is not evidence, and often to proceed from intelligence to evidence means it would reveal sources and tradecraft would be problematic.”

Ms. Thomas echoed Mr. Trudeau’s repeated statements that Chinese interference is serious but did not affect the outcome of the 2019 and 2021 elections.

“The greatest threat of foreign interference comes from the People’s Republic of China,” Ms. Thomas said, but insisted that the past two elections “were fair and legitimate.”

Adam Fisher, a senior CSIS official, testified that the spy agency does not investigate “through the lens of the Criminal Code or criminality” but gathers intelligence on foreign-interference operations that often doesn’t translate into hard evidence that can stand test of the courts. “It is a lower threshold than law enforcement,” he said.

Meanwhile, the House committee is set to vote Thursday on an NDP motion to call on the Prime Minister to set up a public inquiry into Chinese interference in the 2019 and 2021 elections.

The Conservatives and Bloc Québécois said they support a public inquiry into Chinese election interference but the committee’s vote will not be binding on Mr. Trudeau. At a news conference in Vancouver, Mr. Trudeau appeared to resist calls to set up independent inquiry, saying two government panels have already concluded that foreign interference did not affect the outcome of the 2019 and 2021 elections.

“We have an awful lot of mechanisms that are under way right now around determining what kind of foreign interference has happened, is continuing to happen and demonstrating the tools we have,” he said. Mr. Trudeau said he believes the National Security and Intelligence Committee of Parliamentarians, which meets in secret and reports to his office, should study the issue and make recommendations.

He also said the Liberals are working on a foreign-agent registry as security experts have recommended, noting that in many cases newly arrived Canadians are the real victims of foreign interference.

“The greatest targets of foreign interference are diaspora communities themselves. The Chinese government goes after Chinese citizens and Chinese parliamentarians, the Iranian regime goes after the Iranian diaspora. Russian speakers are more exposed to Russian misinformation and disinformation,” he said.

There have been growing calls for a non-partisan public inquiry to determine the extent of Chinese interference, as a result of reporting by The Globe and Global News that detailed illegal activities.

“Conservatives will support efforts to get to the bottom of this, including supporting a truly independent public inquiry,” Conservative Leader Pierre Poilievre told reporters.

But Mr. Poilievre said an inquiry head must be agreed upon by House leaders of three major parties and its work should not interfere with current committee hearings.

“We cannot have yet another Liberal crony named to head up the inquiry,” he told reporters, referring to the appointment of former Trudeau Foundation CEO Morris Rosenberg who wrote a report, released Tuesday, that concluded foreign interference did not alter the outcome of the 2021 election.

Mr. Poilievre said an inquiry should also not be used as an excuse to shut down a Commons inquiry “by simply pushing it off to a secretive and slow process that will not bear results for years to come.” The inquiry should also probe the harassment of Chinese Canadians by Beijing, he said.

“It is absolutely unacceptable that they should be harassed or intimidated by foreign police stations or other techniques,” he said.

Mr. Tupper told MPs that Canadian authorities have “effectively stopped” activities at alleged secret-police outposts operated by Chinese authorities.

The Chinese embassy in Ottawa, meanwhile, released a statement Wednesday saying reports about Beijing’s election interference are “purely baseless and defamatory.” It said China is “not interested in meddling with Canada’s internal affairs; nor have we ever tried to do so.”

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