WE Charity hearings reveal troubling governance structure: Watchdog
OTTAWA -- The co-founders of WE Charity argued Tuesday the organization wasn't plucked to run a student-volunteer program because of any close ties to Prime Minister Justin Trudeau, laying out details about how much the endeavour would likely cost and why the charity used a seemingly complicated structure to manage it all.
Brothers Craig and Marc Kielburger opened four hours of testimony at the House of Commons finance committee by saying they regret not realizing how the deal to have WE run the Canada Student Service Grant would be perceived given Trudeau's ties to the group.
They testified side-by-side before a webcam in a wood-panelled room, faces unnaturally white thanks to the camera's colour balance, peppered by questions from committee members scattered across the country.
As the afternoon wore on, the back-and-forth turned rocky with opposition MPs and the brothers talking over each other, and the Kielburgers slamming what they called inaccuracies meant to drag their organization over the coals for political purposes.
The brothers said WE would have never agreed to take part in the federal program had they known it could jeopardize their 25 years of work.
The duo were highly sought by opposition parties as part of a parliamentary probe into a volunteer program budgeted at $912 million, but which federal officials believed would cost $543 million — and that WE believed would actually cost much less.
WE Charity backed out of administering the program in early July amid a controversy over the Liberal government's decision to award the organization a sole-sourced contract.
Trudeau and his top aide, chief of staff Katie Telford, are scheduled to testify Thursday about the program and the deal with WE.
The Kielburgers said they haven't spoken with Trudeau or his office about the program.
The federal ethics commissioner has begun investigating Trudeau and Finance Minister Bill Morneau over their involvement in cabinet decisions on the project -- Trudeau because of some $300,000 in speaking expenses covered for his family members, and Morneau's daughter being a WE employee.
Morneau also admitted last week that he repaid the organization more than $41,000 in travel expenses for WE-sponsored trips he and his family in 2017.
"The image that you're giving here is that you're getting influence by the kind of power that you have so when you call, man, they call you," New Democrat Charlie Angus told the Kielburgers at one point in their testimony.
Craig Kielburger said he spoke with Morneau in late April, but the student grant program didn't come up -- echoing Morneau's testimony last week.
What did come up was a separate proposal WE submitted to Small Business Minister Mary Ng, Morneau and Youth Minister Bardish Chagger to help some 8,000 youth open small businesses at a cost of up to $14 million.
Craig Kielburger said WE was less interested in the volunteer program and was "trying to advance our own proposal" that it had on the table for two years.
Opposition MPs looked to portray the group as having inside track on running the program because of perceived financial difficulties linked to the COVID-19 pandemic. Liberal MPs asked about WE's involvement with politicians of other political stripes, and funding from the previous Conservative government.
The volunteer program is supposed to provide grants of $1,000 for every 100 hours of volunteering, up to a maximum of $5,000 to help defray the cost of school in the fall.
WE was to connect young people with service opportunities through an online platform and disburse grants. WE would have received $43.5 million if the program reached its full potential.
Government officials told WE it could incur eligible expenses before being awarded the agreement. The brothers said they did so to get the program off the ground quickly, knowing they could lose money if cabinet didn't approve the deal.
WE has lost $5 million over the aborted deal, MPs heard.
"We did this to be of service to the government, not for the government to help us and it is incredibly unfortunate the fallout that has occurred," Craig Kielburger said.
A copy of the funding agreement filed with the committee this week showed the government only planned to spend $500 million in grants, even though the Liberals had described the program as having a $912-million budget.
Employment and Social Development Canada, the federal department overseeing the program, said the $543 million in the agreement was what officials estimated it would cost to administer and pay grants to up to 100,000 eligible students or recent graduates -- "the expected uptake of the program." There was extra money available if the demand was higher.
During testimony, Marc Kielburger said WE expected the majority of students to volunteer between 100 and 300 hours, making the true cost of the program to be between $200 million and $300 million.
WE was paid its first fees of $19.5 million on June 30 -- seven days after one of its arms, WE Charity Foundation, signed the federal deal on June 23.
Former board chair Michelle Douglas told the committee earlier that the foundation didn't appear to have a purpose outside of holding real estate, nor did the board receive a satisfactory explanation for its existence.
The foundation didn't operate or hold any assets before the volunteer program, having been set up originally to limit liability to the charity's assets, the committee heard.
Marc Kielburger cited unspecified expert advice that WE use the foundation to oversee the program because the government expected WE to assume full liability during a health crisis for youth volunteers and partner non-profits. He said ESDC was aware of how WE planned to use its various structures.
On July 3, WE backed out of the agreement. It has promised to repay every dollar it received, about $30 million, but was still sorting out details.
At the time, WE said a program structure was largely in place for the federal public service to manage. It handed everything to the government "hoping to save the program," but problems with what WE put in place have since emerged. The government has yet to open applications.
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