‘Why hasn’t the money been returned?’
Minister unsure why advance not repaid by WE
When questioned at a parliamentary ethics committee, the minister responsible for the Canada Student Service Grant could not say how much of the $30 million advanced by the government to the WE organization had been repaid since the charity organization pulled out of the deal to run the federal program.
“We can share that … $30 million has been released to the organization through the contribution agreement. I was not aware of how much money has been returned,” Bardish Chagger, minister of Diversity, Inclusion and Youth, said Tuesday to House of Commons ethics committee members.
She then offered to provide that information to the committee at a later date.
Chagger was responding to questions by Bloc Québécois MP Rhéal Fortin regarding the end of the contribution agreement between the Trudeau government and the WE organization.
The ethics committee is currently looking at whether there were any conflict of interest issues surrounding the federal government’s decision to outsource the $912-million Canada Student Service Grant (CSSG) to the WE organization.
Prime Minister Justin Trudeau and Finance Minister Bill Morneau, as well as both their families, have close ties to the Toronto-based organization.
Fortin, as well as Conservative MPS on the committee, couldn’t help but voice their surprise at the fact that Chagger did not know how much money the government had recouped to date.
“Why hasn’t the money been returned to this point? That seems odd. It’s been quite some time since the program was cancelled or that WE withdrew,” Conservative MP Michael Barrett asked Chagger.
“We want to ensure that all processes are being followed. So I can assure you that the public service is working with the organization to ensure that it is returned,” Chagger responded.
Before WE pulled out of the deal in early July, the government had agreed to pay the organization up to $43.5 million to cover the fees required to administer the $543.5 million program.
Since then, WE co-founders Craig and Marc Kielburger promised to refund every cent of the money paid by the government, claiming their organization would incur $5 million in losses in the process.
Last week, WE Charity told National Post they had already sent back a significant portion of the funds to Employment and Social Development Canada (ESDC).
“WE Charity is in the process of returning all of the funds. It has thus far returned $22M of the $30M, which was received,” WE Charity wrote in a statement.
“WE Charity has repeatedly communicated to ESDC the desire to return the remaining funds as soon as the government is able to accept the transfer.”
To this day, the government has not corroborated any part of that statement publicly. A government source speaking on background, because they were not authorized to speak on this matter publicly, confirmed the amount sent back by WE, but explained there were complexities.
Lawyers for the federal government and WE are currently negotiating the termination of the contribution agreement to ensure that ESDC doesn’t take on unnecessary liabilities stemming from the program. Once that is done, then WE will be able to send over the remaining balance.
During a separate, earlier testimony at the ethics committee, Clerk of the Privy Council Ian Shugart said that federal officials did not question WE Charity’s financial health or corporate structure during the due diligence process that led to the recommendation that WE was the “best and only” organization that could manage the CSSG.
During her testimony in front of the finance committee in July, the former chair of WE’S Canadian board of directors said there were multiple resignations from the board during the spring following mass layoffs at the organization.
As of August 31, 2019, WE Charity’s financial statements also show it had to request an extension of their bank covenants on two short-term loans that amounted to just over $9 million.
Shugart also said WE told the government that it was fully able to administer the student volunteer grant program in both official languages.
He was not aware that WE planned on outsourcing management of the CSSG in Quebec to public relations firm National, as revealed by La Presse last week.
“The nature of the due diligence was focused on the organization’s capacity to deliver the program. Any other questions regarding the organization, its board of directors” were not considered, because WE had a “track record” with ESDC, Shugart explained.