WE Charity vows to pay Ottawa back in full
Organization says it has already reimbursed about $22M out of $30M
The beleaguered WE Charity says it has reimbursed about $22 million of the $30 million it received from Ottawa to mount the now-cancelled Canada Student Services Grant program.
And in a statement to the Star on Wednesday, the charity said it intends to pay back the rest of the money as soon as the federal government department that was responsible for the program can accept it.
Speaking on background, a government official said it is a complicated matter to disentangle all the agreements and other legal obligations that were associated with the doomed project while ensuring “Canadians are protected,” but that it is expected the money will be repaid in full.
WE Charity was contracted by the Liberal government to deliver one of its central supports for students — a program that budgeted up to $900 million to connect cash-strapped students with non-profit groups and pay them below minimum wage to do volunteer work.
Under a $544-million funding agreement with Ottawa, WE Charity says it “received a transfer of funds into a protected account to pay eligible expenses. WE Charity never accessed those funds.”
The organization added that it spent $5 million of its own money to set up technology and a call centre, and to make other connections to groups to help the deliver the program. It said it intends to absorb those costs and is “in the process of returning all of the funds.” The statement from WE Charity was not attributed to any individual associated with the organization. It said has already returned $22 million of the $30 million it received, and “has repeatedly communicated to (Employment and Social Development Canada) the desire to return the remaining funds as soon as the government is able to accept the transfer.”
WE Charity says it “transferred the technology systems, call centre and coalition partners to the public service hoping that the program would continue,” and “incurred expenses of approximately $5 million dollars to build and launch the systems to deliver” it.
“WE Charity has elected to waive its right to repayment for eligible expenditures as per the contribution agreement,” the statement said. WE Charity co-founders Craig and Marc Kielburger testified last month that the nonprofit organization — which had laid off hundreds of workers during the pandemic — was never going to benefit from the money or use it to pay themselves salaries. The Kielburgers said the funding agreement had specified money would only ever be spent on expenses for the program.
Marc Kielburger told MPs that the decision to absorb the $5 million that WE Charity had already spent on the program “was a very painful, difficult decision, but we felt under the circumstances that it was the right thing to do.” Under the agreement, WE
Charity would have been paid up to $43.5 million to cover administrative expenses of the student grant program.
The program was designed to pay students up to $5,000, depending on how many hours of volunteer service they did.
The Kielburgers said they expected the program would end up costing between $200 million and $300 million, based on the average number of hours they expected students to be engaged.
WE Charity withdrew from the program, and Prime Minister Justin Trudeau and Finance Minister Bill Morneau apologized for failing to recuse themselves from the May 22 cabinet decision to approve WE’s involvement. While they insisted it was the recommendation of the public service to use WE Charity, both politicians had more extensive family ties to the organization than had been known publicly or even to fellow cabinet ministers when the government signed the deal.
Since 2015, WE Charity had paid about $500,000 on speaking fees and expenses for Trudeau’s mother Margaret and brother Alexandre, and covered expenses for his wife Sophie for appearances at WE Charity events. Morneau, whose daughter works for WE Charity, paid the charity $41,000 last month for two trips he had taken in 2017 at the organization’s expense.
In testimony at the House of Commons committee hearings this week, Employment Services Minister Carla Qualtrough acknowledged that the government had “dropped the ball” when it came to Trudeau’s and Morneau’s involvement. On Wednesday she told the finance committee she still did not have any details on how much WE Charity had repaid, but she lamented the loss of the program, saying it was part of a suite of measures to help students.
She insisted she still believes that WE Charity could have connected students with volunteer opportunities in both official languages across the country, in a way that the public service — which was stretched thin — never could have.
Asked by a Liberal MP what should now happen to the unspent funds, Qualtrough said many in the government are considering that question.
Appearing by video later Wednesday, Small Business, Export Promotion and International Trade Minister Mary Ng described how WE Charity had first pitched the Liberal government on a separate program this spring that involved support for young entrepreneurs. Ng said this first came up during a call with Craig Kielburger on April 7 — a conversation that had been scheduled back in February — but was ultimately rejected by her office on April 22.
By that point, according to the testimony of several others at the committee in recent weeks, the public service was already considering outsourcing a different program, the doomed Canada Student Service Grant, to WE Charity.
The WE Charity co-founders testified last month that the non-profit organization was never going to benefit from the money or use it to pay themselves salaries