44th Parl. 1st Sess.

June 6, 2024 10:00AM

Jun/6/24 11:16:19 a.m.
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Madam Speaker, part of my reason for getting into politics was to support small and medium-sized enterprises in this country and ensure that we unlock capital and investment to scale up the innovative solutions that entrepreneurs and small business owners are developing, so we can meet the challenges of today and tomorrow, one of the challenges obviously being climate change. I cannot tell members how committed we in the government are. There is a heartfelt commitment to ensuring that small businesses can access the capital and support they need. Obviously, SDTC has played a pivotal role in that. We got a letter from Canada Cleantech that said, “Canada has consistently outperformed in the cleantech sector relative to its size, partly due to the support of SDTC as a funding source for early-stage technologies.” That is just one example. That is why we feel it is so important to get SDTC back up and running under a new governance framework.

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Context: House Hansard - 326 - Jun/6/24

Mr. Tony Van Bynen (Newmarket—Aurora, Lib.)

Jun/6/24 4:43:48 p.m.
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Madam Speaker, I am pleased to rise today to speak to the motion. On Tuesday, the government announced that it would be transferring Sustainable Development Technology Canada's programming to be based within the National Research Council of Canada. I will speak more about this in a minute. However, I would first like to highlight the events and the independent reviews that have led us to this decision. The government expects organizations that receive public funds to be held to the highest standards. When allegations of mismanagement at SDTC first came to light, the government took immediate action to undertake the proper due diligence to understand the facts. These were serious allegations, and they warranted a careful assessment of all the evidence. It is only with the facts that we can take the appropriate steps to return to the business of supporting our Canadian clean technology sector. As the first step, the government engaged an impartial third party, Raymond Chabot Grant Thornton, or RCGT, to undertake a fact-finding exercise. This focused on organizational policies, procedures, program governance and project approval processes. At its conclusion, the fact-finding exercise did not reveal any clear evidence of wrongdoing or misconduct at SDTC. However, RCGT did make a number of observations that showed that SDTC was not in full compliance with the terms and the conditions of its contribution agreements. These findings warranted a deeper examination, and again, the government took action. Innovation, Science and Economic Development Canada, ISED, worked collaboratively with the Office of the Auditor General in support of a full audit. Just as the government has high standards for the use of public funds, it also expects employees to benefit from a healthy and a respectful work environment. Given this, in addition to the RCGT fact-finding exercise, the government took action to address allegations that related to human resources practices. ISED requested the Department of Justice to appoint a law firm, McCarthy Tétrault, to undertake a fact-finding review of alleged breaches of the labour and employment practices and the policies at SDTC. Current and former employees were permitted to speak freely to the law firm without violating any applicable settlement agreements or non-disclosure agreements. The fact-finding review, which is publicly available, concluded that SDTC's leadership did not engage in the type of repetitive, vexatious or major incident conduct that would constitute harassment, bullying or workplace violence under the applicable standards. Turning now to the Auditor General's audit, as mentioned, the government welcomed the Auditor General's decision to undertake the audit and fully co-operated with the auditors. Evidence collected from all of these independent reviews have revealed lapses in SDTC's governance model. We are taking definitive action anchored in facts, as established by independent parties, most notably the Auditor General. To be clear, the Auditor General did not report evidence or suspicion of criminal behaviour. The government is confident in the rigour and the expertise the Auditor General and her office brought to this issue, and we accept her findings and recommendations. Measures have been established for stronger governance and oversight at SDTC. These measures, which will remain in place, ensure increased transparency and accountability. With the changes in leadership, the government will maintain that confidence as the programming transitions into the next phase. While SDTC has been instrumental in developing a successful clean technology sector in Canada over the years, a new delivery approach to support this vital sector of our economy is now needed. That is why the government took decisive action by announcing a new delivery approach that includes transitioning SDTC and its employees to the NRC. In addition to its proven track record of providing tailored support to Canada's innovative small and medium-sized businesses, the NRC is a Government of Canada organization, and it is subject to rigorous and stringent oversight of its personnel and finances. This move will help rebuild the public trust while increasing accountability and transparency in program delivery. The decision to transfer the programming is not just about sound government, it is about people and the clean-technology industry. Canada's clean-technology sector is world-renowned for developing innovative, clean-technology solutions. In 2024, there were 13 Canadian companies named to the Global Cleantech 100 list. This is a clear testament to Canada's innovative ecosystem and the clean-technology sector's ability to compete against leading innovative countries, such as the United States and Germany. The Government of Canada also recognizes the importance of retaining subject matter experts. These employees have a wealth of experience and knowledge, and have been integral in helping Canada's clean-tech companies move from seed to start-up to scale-up. Their transition to the NRC will help ensure Canada's clean-tech companies will be at the forefront of efforts to address climate change, continuing much-needed federal support for businesses to innovate, grow and create well-paying sustainable jobs. This support will continue. SDTC is resuming funding for all new eligible projects in a sector vital to our country's economy and clean-tech growth. In line with the Auditor General's findings, ISED will enhance the oversight and monitoring of funding through this transitionary period. We know that clean-tech companies have felt the impacts of the funding pause as the government took the time it needed to uncover the evidence and to put in place a robust governance solution. We have done what we set out to do, and we thank the clean-tech sector for its resilience and patience as we shaped a new way forward. The government has done its due diligence, and neither the OAG nor any other independent review found any evidence of fraudulent or criminal activities by an officer, director, member or employee of SDTC. While some of these investigations concluded there were lapses in governance, including their management of conflict of interest, these conclusions did not identify fraud or criminal activity. We are focused on restoring governance at SDTC and getting back to the business of supporting our Canadian innovators. I encourage all members to support the government's actions to advance homegrown clean-tech solutions and achieve Canada's climate goals.

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House Hansard - 326