POLITICS
07/16/2020 21:59 EDT | Updated 07/16/2020 22:10 EDT

WE Charity Could Have Made $43.5 Million In Now-Cancelled Deal: Minister

Testimony reveals PM’s connection to the charity was discussed around the cabinet table.

Jo Hale via Getty Images
Craig Keilburger and Marc Keilburger attend WE Day UK 2020 at The SSE Arena, Wembley on March 4, 2020 in London.

OTTAWA — The WE Charity stood to make up to $43.53 million from a $912-million government deal to administer a student grant program, a federal cabinet minister told the House of Commons finance committee Thursday.

The figure, provided by Diversity, Inclusion, and Youth Minister Bardish Chagger, is higher than the $19.5-million figure previously offered by the government. 

That lower figure was for the first 20,000 student placements under a new Canada Student Service Grant program administered by the WE Charity, Chagger said.

“Our government and I remain committed to students to have these additional supports and opportunities,” she said. “We are committed to finding ways, innovative ways to deliver this program.”

Watch: Charlie Angus presses Bardish Chagger on WE Charity controversy. Story continues below video.

 

WE Charity no longer has a role in the administration of the program. The organization relinquished its role shortly before controversy broke over Prime Minister Justin Trudeau’s family connections with the organization, spurred criticism around potential conflict of interest. 

Trudeau, as well as Finance Minister Bill Morneau, both face separate ethics investigations over their roles in the cabinet decision to tap WE Charity to administer the $912-million program.

Chagger told committee members that the Trudeau family’s ties were brought up for discussion at cabinet.

“Of course we have tough conversations around the cabinet table... Yes, these questions were posed,” she said. 

Chagger appeared as a witness in the first of what’s expected to be a series of committee meetings into the ensuing controversy related to Liberal conflicts of interest, government spending, WE Charity, and the Canada Student Service Grant program.

The minister disputed the choice of words opposition members have chosen to describe the now-cancelled deal. Focusing on semantics, Chagger and members of the public service who also appeared as witnesses, called the deal with WE Charity a contribution agreement not a sole-source contract.

Dominik Magdziak via Getty Images
Margaret Trudeau speaks on stage during the WE Day event at Scotiabank Arena in Toronto on Sept. 20, 2018. Reports from Canadaland and CBC News prompted WE Charity to confirm the prime minister’s mother received approximately $250,000 in honorariums, excluding 20 per cent commission paid to the Speakers’ Spotlight bureau, for speaking at 28 events between 2016 and 2020.

Stephanie Hébert, assistant Employment and Social Development Canada deputy minister, explained that the distinction is that contribution agreements have conditions. They are performance-based and are subject to monitoring, audits, and evaluations, she said.

The public servants repeated this explanation when asked by NDP MP Charlie Angus how much the WE Charity stood to make per student involved in the program.

Opposition MPs have raised concerns about the appearance of conflict of interest after WE Charity, an organization with personal links to the prime minister and the finance minister, landed a multi-million-dollar government agreement outside of a competitive process.

Hébert told MPs that when it comes to negotiating and finalizing contribution agreements, an open competition isn’t necessary.

“We don’t issue calls for proposals for every single agreement,” she said. 

Earlier Thursday, the federal ethics watchdog announced his office has launched an investigation to determine if Morneau breached two sections of the Conflict of Interest Act in his role in WE Charity being originally picked to administer the student grant program.

Morneau’s two daughters, Clare and Grace, are both involved with the charity. One has spoken at WE events and the other has done contract work for the WE organization.

The ethics investigation is not expected to be completed and released until the new year. It takes seven months on average to complete an investigation, according to Ethic Commissioner Mario Dion’s office.

Though a final ethics report is likely more than half a year away, testimony at the finance committee has started to fill gaps in the timeline of how the controversy has unfolded.

Some gaps in timeline filled

Chagger repeatedly pointed to members of the public service as those responsible for identifying WE Charity as the organization best suited to administer a national volunteer summer program for youth.

She named Rachel Wernick, a senior official at Employment and Social Development Canada, as the person who endorsed WE Charity as the organization that could deliver a program on a national scale and within the tight time frame the government wanted. 

Watch: Timeline of the Trudeaus and their WE Charity appearances. Story continues below video.

 

Wernick, who is sister to former Privy Council clerk Michael Wernick, acknowledged she recommended WE Charity but pushed back on the notion that it is up to public servants to warn politicians about breaching potential conflict of interest rules.

“The department did not conduct or provide any assessment of potential conflicts of interest by public office holders,” she said. “The onus is on the public office holders to uphold the guidelines.”

Still, she said, she knew the prime minister’s wife, Sophie Grégoire Trudeau, served as an ambassador for the charity. She was unaware, she said, that the prime minister’s mother and brother had earned income from the group.

WE Charity had sent an unsolicited proposal to help run a service program “related to social entrepreneurship for youth” in mid-April, according to Wernick. That initial proposal was sent to Chagger and Small Business Minister Mary Ng.

Wernick said she called WE Charity co-founder Craig Kielburger on April 19 to field the Toronto-based organization’s interest in administering the student grant program. Wernick explained previous work experience with Kielburger as a motive for the direct call.

ParlVu
Rachel Wernick, a senior official at Employment and Social Development Canada, appears before the House of Commons finance committee on July 16, 2020.

 

Canada Service Corps and Volunteer Canada were also considered to be partners in administering the student grant and volunteer program, she said.

Three days after her call with WE Charity, on April 22, the prime minister announced nearly $9 billion in support for post-secondary students and recent graduates, inclusive of the grant program.

That same day, Wernick said she received an unsolicited proposal from Kielburger on the topic they discussed days earlier. 

According to the National Post, WE Charity co-founder Marc Kielburger revealed in a June 12 internal call that the Prime Minister’s Office had asked the organization to help with the new $912-million federal student volunteer program.  

Wernick said that the government entered negotiations with WE Charity in mid-May, and that the deal was not finalized until June 23.

“Any activities that WE Charity took on during the period leading up to the finalization and approval of the contribution agreement were completely at their own risk,” she said.

Trudeau and Morneau have both apologized for failing to recuse themselves from cabinet discussions related to the $912-million deal for WE Charity to administer a federal program.

Deputy Prime Minister Chrystia Freeland defended her boss and her peers Thursday, also apologizing for the controversy that has dogged the government in the middle of a pandemic. 

“I think all of us, everyone in our government, everyone in cabinet, bears responsibility for this situation,” she said. “Clearly, our government made a mistake. And I want to say to people we’re going to learn from it.”

Note: HuffPost’s previous owner, AOL, sponsored and participated in WE Charity events and Free The Children trips.