CHARITY TO SHUT DOORS IN CANADA
WE OPERATIONS TO END, KIELBURGER BROTHERS TO STEP DOWN
OTTAWA • WE Charity says it is closing its Canadian operations, blaming COVID-19 and the political fallout from the Liberal government’s plan to have it run a multimillion-dollar student-volunteer program for leaving it in financial ruin.
Craig and Marc Kielburger, who are also planning to step down from the organization they co-founded, released an open letter Wednesday explaining the move.
“COVID-19 disrupted every aspect of our work,” the brothers wrote in the letter. “The fallout from the Canada Student Service Grant has placed us as a charity in the middle of political battles and misinformation that we are ill-equipped to fight.
“The financial math for the charity’s future is clear.”
The statement added, “This is a heartbreaking decision.”
The Toronto-based youth organization shared the news with its Canadian-based staff on Wednesday.
WE was initially paid $30 million to run the CSSG program, but pledged to repay every dollar after stepping away from the agreement with the Trudeau government.
Repaying the money dragged out over the course of the summer, however, as WE and the government worked out the details of winding down the program, but according to staff in Diversity Minister Bardish Chagger’s office that money has now been fully repaid.
NDP MP Charlie Angus said WE had so many different entities that it will be difficult to tell how much of the charity is being wound down.
He said the charity had financial problems before getting into the deal.
“This is a group that was clearly in financial freefall, and that economic desperation really drove their attempt to make this very wild pitch to get this huge contract with the government.
“They had deeply embedded themselves in the Trudeau government. And when they were in a financial crisis, they looked to the Trudeau government for help.”
Conservative leader Erin O’Toole said the charity must release all records related to the grant program.
“WE must immediately release the documents that the finance committee requested on their involvement in Justin Trudeau’s $900 million scandal,” he said on Twitter.
WE’s operations in Britain and the U.S. will not be immediately affected. Neither will its for-profit affiliate, ME to WE, which makes money through leadership courses, retail sales and travel programs.
The move represents a stunning fall for the charity, which the Kielburgers first created in 1995 as a way for youth in Canada to help less-fortunate kids around the world.
Few could have foreseen the degree to which the government's spring decision to have WE administer the now-defunct student grant program would hurt both the Liberals and the charity.
The deal would have seen WE paid up to $43.5 million to run the program. The federal government had budgeted $912 million for the program, which was designed to cover up to $5,000 in education costs for students who volunteered during the COVID-19 pandemic. The sole-sourced contract with WE pegged the cost at $543 million.
News of the deal prompted immediate questions about Prime Minister Justin Trudeau's ties to WE. The controversy has since expanded to include former finance minister Bill Morneau. Both face investigations by the federal ethics watchdog into whether they violated the Conflict of Interest Act. Both have apologized for not recusing themselves from the decision to award WE the contract.
A spokesman for Trudeau declined to comment on the news Wednesday.
WE backed out of the deal in early July, citing the political controversy. Many of its corporate sponsors eventually cut ties with the organization.
WE says it plans to lay off 115 Canadian staff and sell all its property in Canada in the coming months, including its landmark $15-million Global Learning Centre in downtown Toronto, which opened in 2017.
It follows news last month that WE would be laying off dozens of employees in Canada and the United Kingdom. At the time, WE said it would assess its real estate holdings but planned to keep its headquarters in Toronto.
The net profits will be put in an endowment fund that will be overseen by a new board of governors and used to complete several projects in communities in Latin America, Asia and Africa that were started by WE but remain unfinished.
The fund will also cover the operating costs of several large-scale infrastructure projects, such as a hospital and college in Kenya and an agricultural centre in Ecuador. However, no new projects or programs will be launched.
All future WE Day events are also being cancelled, while the organization says it will no longer have staff to work with teachers. Existing resources will be digitized and available online.
Asked who will oversee the sale of the charity's property, WE executive director Dalal Al-Waheidi said in a statement that a special committee of the board of directors comprised of individuals with legal, financial and property experience will be responsible.
“One hundred per cent of all proceeds will be directed to the charity and/or towards the formation of the future charitable endowment,” she added. “For the sake of absolute clarity, no individual(s) will benefit in any way from the transactions.”
The question of how and why WE was selected to run the Canada Student Service Grant is expected to feature prominently when the House of Commons returns on Sept. 23, after Trudeau prorogued Parliament last month.