No red flags raised over WE, says top bureaucrat

Charity’s financials not probed by feds

OTTAWA • The federal government’s top public servant told MPS Tuesday that no red flags were raised within government about outsourcing a $912-million student grant program to WE Charity.

Ian Shugart, the Clerk to the Privy Council, also said there were no in-depth investigations into the financial affairs of WE Charity, an organization at the centre of controversy because Prime Minister Justin Trudeau and Finance Minister Bill Morneau both have close family ties to it.

Shugart also promised to provide an “expansive” list of documents related to the grant program to the House of Commons finance committee, which is holding hearings into the controversy.

In his appearance before the committee on Tuesday, Shugart said that given the size of the proposed Canada Student Service Grant, it was natural for both the prime minister and the finance minister to take part in Cabinet discussions about it.

The grant program is intended to pay eligible students between $1,000 and $5,000 for volunteering hours done until October 31, 2020. The committee has heard that WE Charity could have received up to $43.5 million in fees to administer the program. However, after controversy erupted over Trudeau’s close ties to the charity, it pulled out of the program on July 3 and the federal public service is now attempting to run it.

Trudeau has said it was the public service that had recommended WE Charity as the only suitable option to run the program. Opposition MPS are seeking to determine whether Trudeau or any other political officials played an inappropriate role in directing the program toward WE Charity.

Shugart said it was well known that Trudeau had appeared at many WE Charity events, and because of that, he didn’t believe the relationship needed further public disclosure while Cabinet was discussing the issue.

“The prime minister’s involvement with the charity over a long period of time of course was in the public domain,” Shugart said.

“I must say that it did not particularly cross my mind that there was anything that needed to be disclosed because this was a well-known fact at the time.”

However, Shugart said he was not aware at the time that the WE organization had paid about $300,000 in speaking fees to Trudeau’s mother and brother between 2016 and 2020, and had given a $1,400 honorarium to Trudeau’s wife in 2012. The payments were first reported by Canadaland shortly after WE pulled out of administering the grant program.

Although Trudeau took part in Cabinet discussions about the program, Shugart said there is “absolutely no evidence, no suggestion in anything that I have reviewed, that would suggest that the prime minister had any interaction with the WE Charity in relation to this program.”

Shugart said he was also not aware that Morneau had family ties to the charity, including that one of the finance minister’s daughters is a paid contractual employee for WE. Morneau is scheduled to appear at the finance committee on Wednesday.

Both Trudeau and Morneau have said it was a mistake for them not to recuse themselves from discussions about WE’S potential administration of the program, given their personal ties.

Shugart told the committee that in setting up such a program and negotiating a contribution agreement with a third party to run it, there is no specific process for the public service to examine whether a minister is in a conflict of interest. The committee has previously heard from other witnesses that ministers are supposed to identify such conflicts themselves.

MPS asked Shugart if the public service had flagged potential problems with WE Charity’s finances or governance, pointing to media reports about WE’S board being entirely replaced this spring and the charity having to extend its bank loans.

“Did anyone in the public service raise any red flags about the financial Integrity, the financial practices, the financial sustainability, or any other problems related to the WE Charity finances before this issue went to Cabinet?” asked Conservative MP Pierre Poilievre.

“The answer as far as I’m aware is no,” Shugart responded.

“To the best of my knowledge, there were no detailed investigations of WE Charity’s financial affairs,” Shugart later said in response to another question.