The co-founders of WE Charity came to the defence of their organization as well as the Prime Minister’s wife and mother on Tuesday, asserting that WE did not stand to financially benefit from a now-cancelled contract to run a federal student program created in response to the pandemic.
Over four hours of at-times heated testimony at the House of Commons finance committee, Craig and Marc Kielburger said that the government initiated the contract, which would have had their charity administer the Canada Student Service Grant.
WE Charity took a $5-million loss with the cancellation of its role in the program, Marc said.
“When Employment and Social Development Canada asked us to administer the Canada Student Service Grant, we regret that we didn’t recognize how this decision would be perceived,” Craig said.
He said that the 25 days of controversy risked unravelling the charity’s 25 years of work. “We would never have picked up the phone when the civil service called asking us to help young Canadians get through the pandemic if we had known the consequences.”
The Kielburgers’ testimony was their first time speaking publicly since the charity’s contract with the government was cancelled amid conflict-of-interest allegations. The government awarded WE a contract despite multiple financial ties that the families of Prime Minister Justin Trudeau and Finance Minister Bill Morneau have had with the charity. Mr. Trudeau and Mr. Morneau did not recuse themselves from the cabinet decision to award the contract and have since apologized for not doing so. The Ethics Commissioner is investigating both of them for breaches of the Conflict of Interest Act.
The Kielburgers told MPs that they have never socialized with Mr. Trudeau and his wife, Sophie Grégoire Trudeau. They maintained that the involvement of Ms. Grégoire Trudeau and Mr. Trudeau’s mother, Margaret Trudeau, was based solely on their own merits and not on their relationship to the Prime Minister.
“Margaret Trudeau is more than someone’s mother. Sophie Grégoire Trudeau is more than someone’s … wife,” Craig said.
Margaret Trudeau started getting paid for her involvement with events after the Liberals took office in 2015, which Marc said coincided with the expansion of WE Days. “She came not as Madame Trudeau, she came as somebody who is very focused” on mental health, he said.
WE Charity’s co-founders also told the committee that Mr. Trudeau’s brother, Alexandre Trudeau, was invited to participate in their events in part when Ms. Trudeau was unavailable. While their contracts were associated with WE Day, Marc told the committee that they were paid for their role in events around the massive student gatherings including fundraisers, galas, education and cocktail events. Craig explained that this approach helped “to bring partners and sponsors to the table.”
Since 2016, the charity has said Ms. Trudeau has been paid about $312,000 in speaking fees and the prime minister’s brother, Alexandre Trudeau, received about $40,000. The charity said those amounts include a 20-per-cent commission paid to their speaking agency. Ms. Grégoire Trudeau was paid $1,400 for one appearance at an event in 2012. The Prime Minister’s Office has said her “involvement with WE has been cleared by the ethics commissioner.”
The Kielburgers provided the average expenses for each of their appearances. Based on the average they provided, the expenses for Ms. Trudeau were $167,944 over 28 events, $25,326 over seven events for Ms. Grégoire Trudeau and $19,576 over eight events for Alexandre.
The plan for WE Charity to administer the program, which would pay students for volunteer work, was announced on June 25. It was cancelled a week later.
Prior to their testimony at the committee, the charity’s former board chair, Michelle Douglas, testified that she resigned in March due to a lack of financial transparency as the WE organization laid off more than 400 employees because of the COVID-19 pandemic. She said those numbers included layoffs at WE Charity and at its affiliate, ME to WE. In a separate statement, the organization said WE Charity laid off 283 people because of the coronavirus. Of those people, 80 were hired back on contract, leaving the charity with 187 staff.
The contract with the government allowed the charity to collect all of the money needed to run the program upfront rather than getting the money in increments. Ahead of its cancellation, the group had received $30-million out of a possible $43.5-million in funding to run the initiative.
All of it will be paid back, Marc said, which means that the charity won’t charge the federal government for costs it already incurred. “It was a very painful, difficult decision but we felt under the circumstances it was the right thing to do.”
Marc also said that the charity expected the program to cost much less than what the Liberals had budgeted. In April, the government called it a $912-million program, but the contract released on Monday showed that it would only cost “up to” $543.5-million. The government has said $912-million is still allocated for the now-delayed program.
At committee Tuesday, Marc said the organization’s own estimates showed it would likely cost between $200- and $300-million because most students would not reach the maximum number of 500 volunteer hours, which would have qualified them for a $5,000 grant.
“WE Charity agreed to implement the Canada Student Service Grant not to be helped by government, but to help government – and to help young people across Canada,” Craig told the committee.
The two insisted that “the organization did not stand to financially benefit” from the contract. “This was a contribution agreement based on eligible expenses for eligible expenditures,” Marc said.
That assertion was disputed by Conservative MP Pierre Poilievre who said the contract with the government allowed the co-founders “to pay the expenses to yourself.”
“That’s factually incorrect,” Craig said. In response, Mr. Poilievre pointed to the contract, which allowed WE Charity Foundation to “enter into contracts to procure goods and services” from the charity’s other affiliate not-for-profits including WE Charity, WEllbeing Foundation or ME to WE Foundation of Canada.
In a separate statement, WE said it hired 465 fixed-term and independent contractors to help administer the student service grant. After the contract was cancelled, the charity said 15 people were kept on and 450 people were laid off.
The opposition challenged the Kielburgers on their assertion that the roles of Alexandre Trudeau, Ms. Trudeau and Ms. Grégoire Trudeau had nothing to do with their last name.
The WE Charity engages with individuals on the merit that they bring themselves as individuals to important causes, Craig said.
He said Alexandre was brought on to fill an “urgent need” with Ms. Trudeau being unavailable and that he was asked to join because of his focus on the environment.
Conservative MP James Cumming said that suggested “it’s more around the Trudeau name.” And NDP MP Charlie Angus accused the Kielburgers of “buying the name.”
Mr. Angus also pressed the WE co-founders on their charity’s decision not to disclose its interactions with multiple cabinet ministers and government officials with the lobbying registry. And he said having the Trudeau name gave it a leg up.
“Having the Prime Minister’s family, the Trudeau name is enormous,” he said.
Mr. Angus accused the charity of “going under the radar” and avoiding accountability by not registering as lobbyists.
The Kielburgers said their relationship with the Trudeaus is not personal and added that whether they have close ties with them depends on the definition being used.
“I’ve never seen the Prime Minister or Sophie Grégoire Trudeau in a social setting,” Craig said.
“Neither of us have. We’ve never had a meal with them. We’ve never socialized with them ever. So it depends on what your definition of close is.”
He said Ms. Trudeau and Ms. Grégoire Trudeau were called on because of their work on mental health.
In the case of their involvement with the Morneau family, Craig noted that the McCain/Morneau family are “very generous philanthropists.”
The Globe has a sponsorship partnership with WE Charity. The agreement expires on Aug. 31 and will not be renewed.
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