Auditor General Karen Hogan says a recently-adopted House motion demanding the release of documents related to Sustainable Development Technology Canada will compromise her office’s independence.

The Conservative motion, adopted on June 10, also includes the federal government in the request for an extensive file of documents tied to the not-for-profit tasked with financing and supporting the development of clean technologies. The move comes in response to a damning audit on Sustainable Development Technology Canada (SDTC), which prompted Ottawa to dismantle the green fund.

According to Hogan’s June 4 report, SDTC violated its own conflict-of-interest policies in 90 cases that were connected to approval of nearly $76-million in funding awarded to projects. The report also found the foundation awarded funding to 10 ineligible projects out of the 58 reviewed. These 10 projects were awarded $59-million despite not meeting key requirements set out between the government and the foundation. Under SDTC’s five-year agreement with Innovation, Science, and Economic Development Canada (ISED), which started in 2021, the agency had $1-billion to distribute to small- and medium-sized enterprises in the cleantech sector.

Hogan said including her office in the motion was unnecessary.

“I believe the motion does impede on my independence, in that I don’t need to go through the law clerk,” she said during her appearance before the House Government Operations and Estimates Committee on June 10, prior to the vote on the motion.

“I have a proven track record that I am co-operative and supportive with parliamentarians, and that I would co-operate very swiftly with the RCMP if the need arose,” Hogan added.

Hogan’s report found ISED “did not sufficiently monitor the compliance” with the agreements between the foundation and the government.

Innovation Minister François-Philippe Champagne (Saint Maurice-Champlain, Que.) announced on June 4, the same day that Hogan’s report was released, that SDTC funds would be transferred to the National Research Council of Canada (NRC). The federal government also named a new board chairperson, and two new directors at the SDTC to oversee its transition to the NRC.

In a statement, Champagne said the various reviews conducted of the agency have revealed “serious weaknesses in SDTC’s governance, prompting a new delivery approach to government support for the cleantech sector.”

The motion put forth by Conservative House Leader Andrew Scheer (Regina-Qu’Appelle, Sask.) passed with unanimous support on June 10 from the NDP, Green Party, and Bloc Québécois, with 148 nays all from Liberal MPs voting against the motion.

The motion asks the federal government, SDTC, and the office of Auditor General to hand over all documents going back to 2017, including memos, emails, and any other communications shared between government officials and the SDTC, within 30 days. This also includes financial records and declarations of potential conflicts of interest involving SDTC.

The motion also asks Parliament to share these documents with the RCMP for its independent determination on whether or not a criminal investigation into the matter is warranted.

The House can pass motions that, once adopted, either become orders or resolutions. An order—such as this SDTC motion that passed—has the effect of requiring that an action be taken, while a resolution makes a declaration of opinion or purpose. The House of Commons has, as part of its parliamentary privileges, the power to send for records and papers.

On June 10, Hogan also submitted a letter to the House Public Accounts Committee on the “short term and long term impacts of this motion.”

“In my view, the requirement to produce my entire audit file to the law clerk and parliamentary counsel compromises my independence,” she said in her letter. “And it’s also likely to discourage departments, agencies, and Crown corporations from providing me free and timely access to the information required for my audits going forward.”

Hogan also highlighted that the objective of this motion appears to be that the RCMP has access to the information in her audit file, which Hogan said her office is prepared to share if necessary, without requiring the motion.

The auditor general also added “there will be considerable expense” to her office to produce the audit file which would divert financial resources that would otherwise be used to produce audits for Parliament.

Her office reviewed the period between March 1, 2017, to Dec. 31, 2023. During this timeframe, the board of SDTC approved 226 projects—including start-ups, scale-up, and ecosystem projects— totalling $836-million in funding. Eight projects which did not meet eligibility criteria received $51-million in total by the end of the audit.

Conservative motion ‘will not ensure accountability,’ says Champagne’s office

Champagne’s press secretary Audrey Milette said the motion “will not ensure accountability.”

“ISED will strive to fulfill the requirements of the motion passed yesterday to the best of its ability. However, it is important to mention that this motion for which opposition members voted in favour, could put the Auditor General’s independence at risk and compromise future audits,” said Milette, in a June 11 email to The Hill Times.

Hogan’s office said it is working with the law clerk and parliamentary counsel to address the motion, according to a statement by spokesperson Natasha Leduc.

The Conservative calls to involve the RCMP in the matter goes back to a series of parliamentary committee hearings where the billion-dollar debacle unfolded.

Annette Verschuren, the former chair of the SDTC, resigned from her role in November 2023—as did the then-SDTC CEO Leah Lawrence—after the federal ethics commissioner launched an investigation into Verschuren’s alleged misconduct. Both denied the allegations made by the whistleblowers.

Verschuren said in a committee appearance that the SDTC board found “no wrongdoing, no misconduct,” after a three-month review.

Verschuren also confirmed at the House Ethics Committee on Nov. 8 that as chair, she participated in approving COVID-19 relief grants to NRStor—an energy company of which she is the CEO—in 2020 and 2021, totalling more than $200,000.

ISED Canada commissioned the accounting firm Raymond Chabot Grant Thornton in early 2023 to conduct an investigation following the allegations of misconduct of the agency’s management—particularly as it related to what could be millions of dollars in COVID-19 support payments. After a five-month investigation, RCGT’s September 2023 report determined that there was evidence of conflict-of-interest breaches and inappropriate funding disbursements.

ISED also hired a third-party law firm, McCarthy-Tétrault, which interviewed current and former employees of the SDTC after whistleblowers allegations regarding human resources practices. The report by the firm concluded that SDTC’s leadership had not contributed to a toxic workplace and there was no improper employment-related conduct.

ikoca@hilltimes.com

The Hill Times

 

Irem Koca is a Turkish-Canadian journalist who joined The Hill Times in late 2023. She got her start in Canadian media in the Toronto Star's Ottawa bureau, covering federal politics and national stories under the paper's year-long fellowship. With a background in broadcast journalism, she spent several years as a world news reporter at CNN Turkey. Her freelance work on Turkish politics has been featured in The New York Times and Reuters. She is fluent in English and Turkish. See all stories BY IREM KOCA