The board chairwoman of a federal green fund acknowledged she was involved in approving more than $200,000 in grants for her own company.
That news emerged from Wednesday’s meeting of the House of Commons ethics committee. MPs on the committee had some pointed questions for Sustainable Development Technologies Canada (SDTC) board chair Annette Verschuren, who is also president and CEO of NRStor Inc., a Toronto-based energy storage company.
As president of SDTC, Verschuren was involved in approving grants to NRStor totaling $217,000 in 2020 and 2021. The grants were part of the federal green fund’s efforts during the COVID-19 pandemic to send money to companies with existing financing with SDTC.
SDTC is a federal foundation that provides more than $170 million per year in grants to small and medium-sized businesses in clean technology sectors.
Verschuren said he receives an annual salary of $120,000 from NRStor, in addition to his compensation for his role at SDTC.
Questioned by MPs, she said she did not have to abstain from the subsidy decision because NRStor was part of a group of around 100 companies that received the same levels of additional funding from SDTC during the COVID-19 pandemic.
“I followed my lawyer’s advice,” Verschuren told parliamentarians on the committee. “I took legal advice and I think that was the right approach.”
Verschuren said his company did not receive “preferential treatment” because SDTC provided nearly $40 million in special payments during the pandemic.
“We were very afraid of losing the investments we made and the jobs,” he said.
The SDTC is in turmoil after being the subject last month of a whistleblower complaint and a report that found problems with the foundation’s governance and management of public funds.
Several MPs criticized Verschuren for his involvement in the decision to grant subsidies to NRStor.
MP claims that the company received “preferential treatment”
NDP MP Matthew Green said his decision constitutes “at least a perceived conflict of interest, if not a very real one.”
“Couldn’t you understand why the public perception, the taxpayers who are watching this and hearing the discrepancies in that line of reasoning, would see this as a problem?” —He asked Verschuren.
Green said his testimony “raises more questions than it answers.”
Conservative MP Michael Cooper described the situation as “unbelievable”.
“Your company received preferential treatment, in the sense that you were on the board of directors and provided money to it,” he said.
Liberal MP Pam Damoff said with her decades of experience in the business world, Verschuren should have known better.
“To me, common sense would dictate that you should question legal advice and, as a matter of good practice, refrain from doing so,” he said.
Verschuren, former president of Home Depot Canada, insisted she is satisfied with her actions.
“It was considered an operational issue,” he said.
The ethics committee also heard testimony from Doug McConnachie, assistant deputy minister of Innovation, Science and Economic Development (ISED) who oversaw the handling of the whistleblowing complaint against SDTC this year.
“There is a lot of carelessness and laziness”
In his opening speech to the committee, he criticized the fact that the complainants recorded their conversations with him without his knowledge and provided the tapes to Radio-Canada.
“I was extremely naïve to expect my good faith conversations with the complainant to remain private,” McConnachie said. “I never expected my comments to be used out of context to reinforce a narrative that is not supported by independently verified facts.
“I was too transparent, too trusting and I deeply regret any impact this has had on the government, SDTC and ISED.”
In a conversation with whistleblowers that was recorded earlier this year and made public, McConnachie criticized SDTC leadership several times.
“There’s a lot of carelessness and laziness. There’s some outright incompetence and, you know, the situation is just unsustainable right now,” he said in the recording.
‘The minister is going to go crazy’
In a conversation with a whistleblower at the time, McConnachie predicted a fierce reaction from Industry Minister Francois-Philippe Champagne once he was informed about the SDTC report.
“The minister is going to be angry when he hears these things and will want an extreme reaction, like shutting everything down,” McConnachie predicted.
In late July, McConnachie criticized SDTC’s decision to award nearly $40 million in grants during the pandemic.
“It was free money,” he said, comparing it to the controversy that damaged Jean Chrétien’s Liberal government in the early 2000s. “That’s almost a revelation on the level of a sponsorship scandal.”
On Wednesday, McConnachie told MPs his comments did not represent the views of other officials who worked on the file.
“I was prompted to make these speculative and inappropriate comments,” he said.
In their own testimony before the committee, senior SDTC executives attacked the credibility of the government’s investigation into the whistleblower complaint, which was led by Raymond Chabot Grant Thornton (RCGT).
According to SDTC President Leah Lawrence, the company ignored key information and made numerous errors when writing its report.
“Our organization has played by the rules, improved them and achieved results for Canadians. My leaders have acted ethically at all times. I stand behind our record. I am proud of it. I am proud of the companies we built.” “I have helped them succeed,” he told parliamentarians.
He added that while there is room for improvement at SDTC, the investigation did not reveal any cases of misconduct.
The federal government has ordered SDTC to implement a series of reforms and resume funding for companies in clean technology sectors.
The Auditor General’s Office announced last week that it had launched its own investigation into the foundation’s management of public funds.
