Morneau reveals he's paid back more than $41K in travel expenses to WE, faces calls to resign
OTTAWA -- Finance Minister Bill Morneau has revealed that his family took two trips in 2017 that WE Charity paid for in part—one his wife and daughter took to Kenya, and one to Ecuador which he attended with his family—and that his wife has made $100,000 in donations to the organization in recent years.
The admission of further close ties to WE Charity came at the beginning of his testimony before the House of Commons Finance Committee as part of the ongoing study into the controversial decision to grant WE Charity a deal to administer a $912-million student grant program.
Morneau said that after reviewing his personal records, he found documentation that shows his family paid expenses including flight and hotel costs totaling approximately $52,000, but to his complete “surprise” there were outstanding expenses for aspects of the trips to see the humanitarian work that the charity was doing, that his family was not charged for, and had not paid.
Morneau said that after an assistant reached out to WE to ask for the total amount of expenses incurred, he wrote a $41,366 cheque on Wednesday, just prior to his committee appearance, to the organization to cover the outstanding amount.
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“I expected and always had intended to pay the full cost of these trips, and it was my responsibility to make sure that was done, not doing so, even unknowingly is not appropriate. I want to apologize for this error on my part. My practice has always been to personally pay for expenses incurred in my role as finance minister whenever I believe there to be any perception of potential personal benefit,” Morneau told MPs on Wednesday.
“The error this time, even though I was not traveling in my role as minister should not have happened,” he said, apologizing.
In a statement sent late Wednesday night, WE Charity said that “from time to time on a complimentary basis” the organization has invited donors and potential big donors to see its work firsthand, and the trips were offered to Morneau’s family in part because they are “known philanthropists with a history of significant donations.”
WE said that generally any required reporting of these complimentary trips is left to the attendees, and that the cost to stay in WE accommodations was US$4,395 per person for Morneau’s family if they had paid at the time.
As for the two donations Morneau's wife Nancy McCain made to WE, Morneau said both were for $50,000. One was in April 2018 to support students in Canada, and another one in June 2020 to support COVID-19 relief in Kenya and in Canada.
“The work that WE and organizations like them do, is important to me,” Morneau said, going on to speak about his family’s charitable work.
TORIES CALL FOR RESIGNATION
These latest revelations immediately resulted in a barrage of fresh questions from opposition MPs who were poised to grill him on the extent to which he and his department had contact with WE Charity while developing the grant program.
Conservative MP Pierre Poilievre asked whether Morneau was aware of the ethical breach of taking paid trips, while NDP MP Charlie Angus questioned whether over his tenure as a Liberal MP and as finance minister, which dates back to 2015, he had ever read the Conflict of Interest Act.
Liberal MP Annie Koutrakis thanked Morneau for his “candour” in delivering this testimony.
The conflict of interest rules prohibit cabinet ministers from accepting gifts of this nature from those who have business with the government, as the previous ethics commissioner ruled against Trudeau over his trip to the Aga Khan’s private island in 2016.
Morneau repeatedly emphasized how this was “a mistake” on his part, and that he was not aware of the outstanding $41,000 in expenses, to which Poilievre questioned how he could forget about an expense that for some Canadians amounts to their yearly income.
Morneau also told MPs that even given all of these connections, he does not believe he had a conflict, though he recognizes “the legitimate questions about the perception of a conflict.”
At the end of his testimony, Conservative MP Michael Cooper put forward a motion to be debated related to the $41,000 Morneau said he repaid. He asked the committee to call on the finance minister to immediately resign, a proposal which will be discussed at a future meeting.
The Conservative party is holding a press conference on Thursday morning to discuss their calls for Morneau to resign over his admission. The Liberal caucus also has a 5:30 p.m. virtual meeting, which was scheduled prior to the day’s developments.
This new information comes after Morneau’s office confirmed that his daughters have connections to the charity, and that he did not recuse himself from any cabinet discussions about the deal.
Both Morneau and Prime Minister Justin Trudeau are under investigation by the federal ethics commissioner for possible breaches of conflict of interest law given their involvement in the cabinet decision to select WE to run the program, as they both have close family connections to the group.
Asked to comment on the calls for Morneau to resign and whether Trudeau still had confidence in his finance minister, PMO spokesperson Ann-Clara Vaillancourt said that Morneau was “upfront with the committee and transparent with Canadians today,” and that he “is continuing to do this work that Canadians rely on.”
Morneau is the MP for Toronto Centre and was first elected under Trudeau in 2015. He has held the finance minister role the entire time he’s been an MP.
His family founded the human resources firm Morneau Shepell and his wife Nancy McCain’s family owns McCain Foods.
He has previously come under fire for ethics issues related to his assets. In 2017 he faced criticism and questioning over using an ethics loophole to not put his assets in a blind trust after becoming a minister, which the then-ethics commissioner cleared him on; as well as for not properly disclosing a family villa in France.
NEW DETAILS ON TIMELINE OF DEAL
The finance minister offered new details on Wednesday about when his office first became aware of WE’s interest in operating a student program.
The agreement to outsource the volunteer program would have seen WE Charity receive up to $43.5 million to administer the $912-million program that was set to offer payments to students for volunteer work done with pandemic-related organizations in their communities over the summer.
The program was first revealed by Trudeau on April 22 as part of a $9-billion student support package, with WE Charity being announced as the group to run it in late June. By then WE was already being discussed behind the scenes as an option to run the program after Finance Canada officials suggested the group given they had already submitted an unsolicited pitch for a digital student program.
In a statement provided to reporters in advance of his testimony, spokesperson Maéva Proteau said that Morneau’s office received a proposal from WE on April 9 pitching a social entrepreneurship program, and then on April 21 his office received a second proposal.
“It was ultimately decided that the Government would pursue a student grant program, which was announced by the Prime Minister on April 22nd and developed over the subsequent weeks. The public service recommended that this program be administered by WE Charity, and the Government accepted that recommendation,” said Proteau.
Morneau then further told the committee that he called WE Charity co-founder Craig Kielburger directly on April 26 to talk about the COVID-19 response more generally and not the specific grant offering, as he was reaching out to a range of groups. It wasn’t until May 22 that the proposal was presented to cabinet, which he approved the funding for on June 3.
“We were in a position where we were trying to determine ways that we could deliver on behalf of students. That was the goal here,” Morneau said.
WITNESSESS CRITIQUE CHARITY
Morneau’s testimony follows an earlier panel of witnesses that offered their perspectives on the WE Charity’s organizational structure, financial situation, and charitable standing. Among the witnesses were Jesse Brown, the publisher of news website Canadaland which has reported on the organization from several angles recently; and researcher focused on “following the money behind activism” Vivian Krause, who made claims that WE has shared information with the Liberal Party of Canada but offered no documentation or proof to verify that claim.
In a statement, WE Charity issued a response to the testimony from these witnesses, seeking to correct “several inaccurate statements.” The organization stated that it has never shared its database with any political party or corporate group, and sought to clarify the difference between the WE Charity Foundation, which was the entity that signed the agreement to run the program, and WE Charity.
“As per the contribution agreement, the Government of Canada outlined that WE would indemnify the government of Canada from all losses related to the participation of the first 40,000 students as well as the non-profit partners who were engaging those students. WE Charity was therefore assuming significant possible legal liability for the program, especially considering the service work would be done during a global health pandemic. Such liability could overwhelm WE Charity, and counsel advised that the contracting party would preferably be ‘WE Charity Foundation’,” said the charity.
As The Canadian Press has reported, in Tuesday, Canada’s top public servant testified that there is no evidence that suggests that Trudeau spoke with WE Charity before the organization was awarded the deal.
Clerk of the Privy Council Ian Shugart suggested that typically a deal of that size would have to go before the prime minister and it would be up to Trudeau to declare a conflict.
WE Charity founders Craig and Marc Kielburger are slated to appear next Tuesday, to weigh in on their role in initially pitching a digital youth entrepreneurship program and ending up running a separate multi-million dollar student volunteering program. In a statement the brothers said they look forward to the opportunity to “set the record straight.”
Announced on Wednesday afternoon, Trudeau and his top aide Chief of Staff Katie Telford are also set to testify before the committee at a yet-to-be-determined time.
GRANT COMING TOO LATE
Meanwhile, two organizations that represent thousands of post-secondary students are calling on the federal government to scrap the Canada Student Service Grant program altogether, and instead reallocate the funding to existing student programs, as the Green Party has previously called for, or put more directly towards covering the cost of students’ tuition.
Both the Canadian Federation of Students and the Canadian Alliance of Student Associations have said that there isn’t enough runway left in the summer for the program to be launched with enough time for students to volunteer the needed minimum 100 hours to receive the first threshold for a grant of $1,000. It took from late April to late June before the promised program was more fulsomely articulated and launched, and within days it was halted to the grant controversy.
The groups also shared concerns raised by others, that the program’s design was such that it essentially offered paid positions at a rate lower than minimum wage.
“The goal for the Government of Canada should be to get support to students as quickly as possible in an efficient and effective manner,” said Chair of the Canadian Alliance of Student Associations Bryn de Chastelain in a statement.
“Students have been expecting financial aid from the government, and are relying on it to continue their educational pursuits… the government needs to be timely in providing clarity to students and ensure no student is left behind,” de Chastelain said.
With files from CTV News' Rachel Gilmore and The Canadian Press