07/28/2020 19:03 EDT | Updated 07/30/2020 19:42 EDT

Kielburgers Say WE Losing $5 Million After Canada Student Service Grant Cancellation

The WE organization co-founders answered MPs’ questions for four hours.

OTTAWA — WE Charity would not have made any money from the cancelled agreement with the federal government to run a student volunteer program budgeted at $912 million, organization co-founders told MPs on the House of Commons finance committee Tuesday.

WE co-founders Marc and Craig Kielburger answered questions for four hours via webcam, repeatedly denying that their organization was tapped to administer the program because of its ties to Prime Minister Justin Trudeau and his family.

“WE Charity agreed to implement the Canada Student Service Grant not to be helped by government, but to help government and to help young people across Canada,” Craig Kielburger said in his opening remarks. “This program was developed in the midst of a global pandemic, when governments and the private sector were scrambling.

Hannah Yoon/The Canadian Press
Craig Kielburger and Marc Kielburger speak during "We Day" in Toronto on Oct. 2, 2014.

“Some have suggested that WE Charity was in dire financial straits prior to the (Canada Student Service Grant) and that somehow motivated our actions. It simply isn’t true.”

At one point, Craig Keilburger expressed regret for signing a deal with the government in the first place.

“When Employment and Social Development Canada asked us to administer the Canada Student Service Grant, we regret that we didn’t recognize how this decision would be perceived,” he said. 

Craig Kielburger said they would have “never picked up the phone” if they had known the political fallout would spark a controversy that has now put their 25-year-old charity in “jeopardy.”

“It was a favour that we were doing to be helpful to Canada,” he told the committee.

When Employment and Social Development Canada asked us to administer the Canada Student Service Grant, we regret that we didn’t recognize how this decision would be perceived.Craig Kielburger

His older brother, Marc, told committee members the agreement they signed with the government only ensured repayment for program expenses. WE stood to receive as much as $43.53 million if they had run the program to its full potential, connecting young people with service opportunities through an online platform.

Though the program had a budget of $912 million, it was revealed in documents this week the federal government agreed to pay no more than $543.53 million in the deal, with $500 million earmarked for grants.

The CSSG is meant to provide eligible post-secondary students and recent graduates grants of $1,000 for every 100 hours of volunteer work related to the COVID-19 pandemic, up to a maximum of $5,000.

The Kielburger brothers said they expected the cost of the program to cost between $200 million and $300 million. “Very few” young people would have completed 500 hours of volunteer work needed to receive the full $5,000, Marc Keilburger said. 

Sean Kilpatrick/The Canadian Press
Marc Kielburger and Craig Kielburger are pictured on CPAC as they appear as witnesses via videoconference during a House of Commons finance committee in Ottawa on July 28, 2020.

Marc Kielburger said the government advanced $30 million to WE, but a decision was made to return the money as soon as the agreement became “political.”

“As soon as this program was put into a political nature, we immediately decided that we wouldn’t be taking any of those funds. That was a decision that the organization made. We’d be losing approximately $5 million in this process. It was a very difficult and painful decision, but we felt under the circumstances it was the right thing to do,” he said.

Few details were shared about the $5 million Kielburger said the organization is losing or what those costs entail.

The organization is also facing a drop in corporate sponsorships in the fallout from the controversy. 

Virgin Atlantic Airways recently announced a decision to suspend its partnership with the Toronto-based international charity, and the Royal Bank of Canada has said it is currently reviewing its relationship with the organization. 

The Kielburger brothers were the latest witnesses in the committee’s ongoing study of the government’s controversial decision to tap WE to oversee the volunteer program.  

Prime Minister Justin Trudeau initially defended the deal, saying WE was recommended by the public service as the “only” organization that had the reach and resources to run the new national program. The deal faced immediate accusations of cronyism because Trudeau has appeared at several WE events over the years and his wife, Sophie Grégoire Trudeau, is an “ambassador” and hosts a podcast for the organization.

The partnership was scrapped in early July, about a week after the prime minister announced it.

We’d be losing approximately $5 million in this process. It was a very difficult and painful decision, but we felt under the circumstances it was the right thing to do.Marc Kielburger

Since then, Canadaland and CBC News have reported that members of the Trudeau family have been paid to speak at charity-related events. 

WE Charity said this month that Margaret Trudeau, the prime minister’s mother, received “a total of approximately $250,000 in speaking honorariums” for speaking at 28 WE Charity events between 2016 and 2020. Alexandre Trudeau, the prime minister’s brother, received $32,000. Those figures do not include a 20 per cent commission to the Speakers’ Spotlight Bureau.

WE Charity also said Grégoire Trudeau received a “one-time speaking honorarium of $1,400” in 2012.

VALERIE MACON via Getty Images
WE Craig Kielburger and Mark Kielburger speak on stage during WE Day California on April 25, 2019. 

The Kielburgers were asked several questions by MPs probing their relationship with Trudeau and members of his family. 

Craig Kielburger suggested they have no personal relationship with the prime minister, explaining they’ve never sat down for a meal with Trudeau. Though the brothers conceded Margaret Trudeau was tapped to appear at WE events after her son became prime minister in November 2015, they repeatedly said she was chosen because of her advocacy on mental health, not her famous last name.

“Margaret Trudeau is more than someone’s mother. Sophie Grégoire Trudeau is more than someone’s wife,” Craig Kielburger said.

Asked at one point why Alexandre Trudeau was paid to speak at WE events, Craig Kielburger pointed to his work as an “environmentalist” and documentary filmmaker.

Bernard Weil via Getty Images
Sophie Gregoire-Trudeau speaks during the Invictus Games Closing Ceremony on Sept. 30, 2017. 

Questions have been raised recently over the charity’s decision to use its foundation arm, instead of WE Charity, to enter an agreement with the federal government.  

Several committee members, including NDP MP Charlie Angus, suggested the WE Charity Foundation had no accountability structure to run a massive new federal program. 

The Kielburgers disagreed, repeatedly denying it was a shell company. They said ESDC asked them to assume responsibility for 40,000 volunteers during a pandemic.

It was a favour that we were doing to be helpful to Canada.Craig Kielburger

Marc Kielburger said they followed advice to use their foundation arm to help take on that “massive liability.” 

The committee meeting often turned tense, with chair, Liberal MP Wayne Easter, calling out Tory finance critic Pierre Poilievre for interjecting as the Kielburgers spoke. Angus bluntly told the Kielburgers that while his daughters were once inspired by their organization, he doesn’t trust them anymore.

Liberal MPs also made a point of highlighting that Conservative MPs have participated in WE events in the past, though that has nothing to do with the potential conflict issues playing out right now.

Former WE Charity board member Michelle Douglas told the committee earlier a number of reasons led to her resignation in March, including a lack of transparency surrounding hundreds of layoffs at the onset of the COVID-19 pandemic.

Douglas said she could no longer perform the oversight duties of her job. Craig Kielburger called her on March 25 to ask her to resign from the board, she said, adding she also had a hard time accessing the organization’s chief financial officer.

“It was clear that there was a breakdown of trust between the founders and me as board chair,” she said. 

Marc Kielburger acknowledged that the charity had to issue hundreds of layoff notices at the onset of the COVID-19 pandemic. He called them “hard decisions” that were taken “very early on” to ensure financial stability for the charity.

Craig Kielburger said travel restrictions and widespread physical distancing measures ground the charity’s trips and development projects to a halt.

Controversy highlights Trudeau, Morneau family ties

Trudeau and Finance Minister Bill Morneau are both facing ethics investigations and opposition calls to resign for not recusing themselves from discussions around the initial deal with WE.

Trudeau has apologized multiple times for failing to recuse himself from cabinet discussions about the deal.

“What I also deeply regret is the fact that I have brought my mother into this situation in a way that is, you know, really unfair to her,” he told reporters outside his Ottawa home at Rideau Cottage on July 13.

WE co-founders Craig and Marc Kielburger introduce Prime Minister Justin Trudeau and his wife Sophie Gregoire-Trudeau as they appear at the WE Day celebrations in Ottawa on Nov. 10, 2015.

“I should have been thoughtful enough to recuse myself completely from any discussions around WE because of these connections, from the very beginning, and I did not. And I’m very sorry about that.”

Trudeau is currently under investigation by the federal ethics commissioner for potentially breaching two sections of the Conflict of Interest Act; including one provision that requires public office holders to recuse themself from any discussions that may give rise to a potential conflict of interest.

It is the same section of the Act the prime minister previously violated when he accepted family vacations to the Aga Khan’s private island in 2016. 

Morneau’s own family ties to the organization have come under intense scrutiny in recent weeks. One of his two daughters was an unpaid speaker at events. His other daughter is currently working on a contract with WE until the end of August.

I should have been thoughtful enough to recuse myself completely from any discussions around WE because of these connections, from the very beginning, and I did not. And I’m very sorry about that.Prime Minister Justin Trudeau

Morneau told the House finance committee last week that shortly before his appearance, he wrote WE a cheque for $41,366 to repay three-year-old travel expenses for a family trip to visit the organization’s school projects in Ecuador. 

The finance minister said he didn’t know the trip was free. WE issued a statement after his testimony confirming they had paid Morneau and his family’s travel expenses.

Morneau also said his family has donated $100,000 to WE since 2018, with the most recent contribution paid in June. He has also apologized for failing to recuse himself from cabinet discussions related to the CSSG deal with the WE organization.

The finance committee will continue its hearings delving into the WE controversy on Thursday with the prime minister scheduled to take his turn in the hot seat.

With files from The Canadian Press

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