Top civil servant says WE Charity's governance and finances not examined during 'due diligence'
OTTAWA -- When the prime minister pulled the brakes on granting WE Charity the administration of an up-to-$900-million federal program and called for increased due diligence, those checks and balances focused on the organization's ability to deliver the program and not on any governance or financial issues within WE, according to Canada’s top public servant.
Clerk of the Privy Council Ian Shugart was in the hot seat for the latest ethics committee meeting probing the government’s now-cancelled decision to have WE Charity manage the federal program.
Shugart said the internal issues within WE Charity — such as their finances in the wake of COVID-19, resignations among their board of directors and a governance structure that the organization itself has described as "more complicated than it needs to be" — were not considered.
"Those issues, with respect to the WE Charity Foundation, were not raised in the subsequent briefing and to my knowledge, they were not flagged as material for the examination of the ability of WE to deliver the program," Shugart said.
Instead, Shugart said the due diligence Prime Minister Justin Trudeau had requested focused on "the ability of the organization to deliver the program" as it relates to issues such as Canada's official languages, the regional reach of the organization, and its ability to contact Canadians who are "typically harder to access," such as "disadvantaged" people.
He went on to say that, had he known then what he knows now about WE Charity, a further probe of the organization's finances and governance structure may have been a good call.
"I think knowing in retrospect what we know now, we probably would have inquired further," Shughart said.
"But I must also say that even looking back now, I have no evidence that the WE organization, had the program gone ahead, would not today be able to deliver the program as set out in the contribution agreement."
Speaking about the contribution agreement and the centre of this scandal, Shugart also told the committee that it’s "typical."
"The contribution agreement in this case was typical of relationships between a government department and an entity," he said.
He added that these agreements are guided by "due diligence" with respect to the interests of the crown.
CHAGGER SAYS SHE DIDN'T SPEAK TO WE ABOUT GRANT BEFORE ANNOUNCEMENT
During her own testimony Tuesday, Youth Minister Bardish Chagger was asked repeatedly about an April 17 phone call she held with Craig Kielburger — though she insisted they did not discuss the Canada Student Service Grant (CSSG), despite the fact that the program’s announcement came just five days later.
"In regards to the April 17 meeting that the member is referring to, it was in regards to an unsolicited social entrepreneurship program for youth," Chagger told the committee.
"I made myself available to listen to that information. It's not something that I would have full jurisdiction or be the lead on, but I did listen to it and it's not something that I was considering."
Chagger was also pressed on the $43 million that WE Charity was slated to receive for the administration of the program, with MPs questioning her about how much of that money was already in WE's pockets — and when it would be repaid.
The minister said $30 million of those funds was delivered to WE before the program was abruptly cancelled, but that she didn't know exactly when it would be returned to the government.
"What we do know is that the program is no longer running and the money, as the organization has referred to, will be returned to the government," Chagger said.
QUALTROUGH: 'I OFFER NO EXCUSE' FOR PM, MORNEAU
Employment Minister Carla Qualtrough, who also testified Tuesday, hasn’t been overly involved in the decision-making process throughout this scandal. However, Employment and Social Development Canada was the department within which staff concluded WE Charity was the only organization capable of delivering the program, according to the government.
While Qualtrough said she was aware that Trudeau pushed back on WE's involvement with the program, she also started her testimony by clarifying that she is not excusing Trudeau — or Morneau's — behaviour.
"I offer no excuse or justification for the prime minister or the finance minister with respect to them having not recused themselves from the discussions and decisions around having WE Charity deliver the CSSG program," Qualtrough said.
"Both have apologized and acknowledged that they should have recused themselves, and there is an ongoing investigation by the ethics commissioner and both are fully complying with it."
This is the third time Trudeau has come under investigation by the ethics commissioner during his tenure as prime minister. Speaking in her own committee testimony on Tuesday, former ethics commissioner Mary Dawson shared an optimistic outlook for the overall state of ethics in politics.
"I generally think Canadians are pretty good, and there are always ethical errors, and that's what we’ve got the Act for," Dawson said.
"But generally speaking, I don’t think we're a horrible country and I think the government's generally well meaning and pretty good."
The decision to grant WE Charity the now-cancelled contract came under fire after the charity's ties to Trudeau and Finance Minister Bill Morneau's families were revealed.
Trudeau's mother, Margaret Trudeau, spoke at approximately 28 WE Charity events and was paid $250,000 in speaking honorariums between 2016 and 2020. His brother, Alexandre Trudeau, also spoke at eight WE Charity events from 2017 to 2018 and was paid a total of approximately $32,000.
In addition to this, Trudeau's wife, Sophie Gregoire Trudeau, received a "one-time speaking honorarium" of $1,400 for participating in a youth event in 2012 before Trudeau became leader of the Liberal Party.
Meanwhile, WE Charity paid in part for two trips that members of Morneau's family took in 2017 — one of which Morneau himself took part in.
Morneau has apologized for the "error" and said it was his full intention to cover the full cost of the trips — though he only last month repaid the $41,000 the charity had initially covered related to the trips to Kenya and Ecuador. The finance minister's daughter Clare has also spoken at WE events, and his daughter Grace is currently employed by WE Charity.
Both men have apologized for not recusing themselves from the discussions. Trudeau has insisted that he was not in a position of conflict during the conversations about the grant — but rather, a perception of conflict.
The prime minister has also said he expressed concern about the choice of WE Charity when he first learned of it. He said he was worried about a perception of conflict, and as a result asked the public service to "put the brakes on" to ensure the organization really was the only one that could have delivered the program.
"I wanted to push back and really make sure that everyone could say without a shadow of a doubt that this was…the way to deliver the program recommended by our outstanding and professional public servants," Trudeau said in a press conference July 31.
Still, the apologies and explanations have not quelled opposition calls for the two men to step down from their jobs.
Conservative Leader Andrew Scheer reiterated that call earlier on Tuesday, though he prioritized one resignation over another.
."It doesn't really matter who is minister of finance, as long as Justin Trudeau is prime minister," Scheer said.
He accused Trudeau of having a "very high" tolerance for scandal.
"I challenge Liberal members of Parliament to do something about that. They can control who leads their party," Scheer said.
The Bloc Quebecois has also called on both Trudeau and Morneau to resign.