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Prime Minister Justin Trudeau’s family members have been paid to participate in WE Charity events and Bill Morneau’s daughter works at the organization.

Sean Kilpatrick/The Canadian Press

WE Charity sent the Finance Minister’s office a proposal for a program that included engaging youth in service the day before Prime Minister Justin Trudeau announced the government’s new student service grant and two months before WE was awarded the contract to administer the program.

The new information was confirmed to The Globe and Mail on the eve of Bill Morneau’s Wednesday appearance at the House of Commons finance committee, where he will testify about the contract. Opposition MPs are seeking to determine the extent of the behind-the-scenes interactions between Liberal officials and WE Charity in advance of the April 22 announcement of the Canada Student Service Grant (CSSG) and the June 25 announcement that it would be administered by WE.

By July 3, the outsourcing was cancelled amid conflict-of-interest concerns.

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Prime Minister Justin Trudeau’s family members have been paid to participate in WE Charity events and Mr. Morneau’s daughter works at the organization. Neither recused themselves from the decision to award the charity a contract, worth up to $43.5-million, to run the program.

Until now, government officials and WE Charity have only disclosed that one proposal was sent to government prior to Mr. Trudeau announcing the program. That proposal was mentioned by civil servants speaking at the finance committee last week and was sent on April 9, according to the charity. Last week, WE stressed that the April 9 proposal was a “distinct submission on another matter” which was connected to social entrepreneurship and unrelated to its subsequent pitch to the government to run the CSSG.

However, on Tuesday, Mr. Morneau’s spokesperson Maéva Proteau confirmed his office received two proposals – the one on April 9, as well as another on April 21 that appears to have some overlap with what the Prime Minister announced on April 22.

“The proposal that Finance Canada received on April 21st was related to engaging young Canadians in service and social entrepreneurship programing,” Ms. Proteau said.

“The public service recommended that [the CSSG] be administered by WE Charity, and the Government accepted that recommendation.”

Prime Minister Trudeau and WE Charity: The story so far

The Globe and Mail asked the Prime Minister’s Office on Friday whether the charity sent it any proposals. Mr. Trudeau’s office has not yet responded.

The grant program will pay students up to $5,000 if they complete 500 hours of volunteer work. The initiative has been delayed since WE’s involvement with it ended.

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In a separate statement Tuesday, the charity said it sent a proposal “including a student volunteer program and a social entrepreneurship program to the finance minister’s office after being approached by the public service.”

The charity declined to provide further information, noting that its co-founders Marc and Craig Kielburger will be testifying at the finance committee next week.

“They are eagerly anticipating the opportunity to set the record straight and clarify a number of matters,” the charity said.

Last week, WE said its April 9 pitch was to run digital programs to give youth “entrepreneurship expertise” and mentorship. The proposal included paying participants a $500 cash grant. WE’s proposal included a cost to taxpayers of between $6-million and $14-million depending on the scale of the program. The specific contents of the charity’s April 21 proposal were not released to The Globe on Tuesday.

The Globe is a media partner of WE Charity.

Ms. Proteau said the Finance Minister’s staff and department officials “engaged with the WE organization” on the April 9 proposal. Mr. Morneau’s is one of three ministers’ offices that had discussions with WE about a proposal in April that they all said was unrelated to the Canada Student Service Grant.

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The charity also discussed the April 9 proposal with Diversity, Inclusion and Youth Minister Bardish Chagger, her spokesperson Danielle Keenan said. And staff in International Trade and Small Business Minister Mary Ng’s office also discussed a proposal with the charity in April, her spokesperson Ryan Nearing said.

Asked to clarify what the proposal was about, Mr. Nearing said he had “nothing to add.”

At the finance committee’s Tuesday meeting to study the controversy, Privy Council Clerk Ian Shugart told MPs both Mr. Trudeau and Mr. Morneau would need to be involved in such a major program decision in spite of concerns of conflicts of interest. But he stressed that he was not making a judgment on whether they should have recused themselves from the final decision.

“I could not imagine how the Prime Minister and the Minister of Finance could not have been involved as part of this process,” Mr. Shugart said. “This was a fundamental policy issue for the government,” he added, pointing to the scale of the program as the reason why the two senior Liberals needed to be aware of it.

NDP MP Peter Julian called his comments surprising, and asked whether that means Mr. Shugart believes “there’s a limit to where the conflict of interest code would apply.”

In the House of Commons on Tuesday, Conservative Leader Andrew Scheer accused Mr. Trudeau of trying to “hide behind” the public service in an effort to avoid “tough questions about the relationship with an organization that paid members of his family cash.”

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Mr. Trudeau defended the spirit of the program and noted that he has apologized for not removing himself from the cabinet decision.

“Of course, as I apologized for, I should have recused myself because of the connection with my family,” Mr. Trudeau replied. “But that does not take away from the fact that the public service recommended that organization.”

Yet Rachel Wernick, the senior public servant who made the recommendation, told the finance committee last week that she did so after a conversation with Finance Department officials, including Michelle Kovacevic, a Finance Canada assistant deputy minister. Ms. Kovacevic is scheduled to appear Wednesday at the same time as Mr. Morneau.

At the finance committee’s Tuesday meeting, Mr. Shugart was asked by Conservative MP Pierre Poilievre whether anyone in the public service raised “any red flags” regarding the finances of WE Charity before the issue went before cabinet.

“The answer, as far as I am aware, is no,” said Mr. Shugart, who also said outsourcing programs is normal in government.

Mr. Shugart pledged that he would approve the release of all related communications involving political staff in the Prime Minister’s Office and the Finance Minister’s office and their interactions with the public service. He was then asked whether he would provide recordings of private video-conference discussions related to WE.

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“If there is such a thing, we can provide all of that. My intention … is to be expansive as possible in the information we provide to the committee,” he said.

Mr. Shugart also pledged to release the contribution agreement between the federal government and WE Charity. He said a version of the CSSG will still go ahead, but that “it will, without question, be less than was envisaged through the third party delivery of the program.”

Chris Aylward, national president of the Public Service Alliance of Canada, which is the largest union of federal public servants, said the administration of the program should never have been outsourced. “If the program had been turned over to the public service to organize a delivery system, it is likely students would now be receiving some actual benefit,” he told the committee.

Prime Minister Justin Trudeau was grilled in the House of Commons Tuesday about the Liberal government’s initial choice to have WE Charity to administer a $900-million student grant program. The Canadian Press

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