The levels of government are competing in imagination these days to win the prize for mismanagement of public funds. The former and current directors of the Office de consultation publique de Montréal (OCPM), Dominique Ollivier and Isabelle Beaulieu (whose days seem numbered), have shown brazen waste by accumulating expensive trips and meals at the restaurant. Quebec Finance Minister Eric Girard jumped in with both feet, offering the Los Angeles Kings at a big price a stadium they needed anyway to play two exhibition games next year.
But Ottawa is not left out. In fact, we have been discovering for several weeks, thanks to the revelations of Radio-Canada and the Globe and Mail, a disconcerting lack of vigilance in the granting of public funds in the context of a pandemic. As well as appearances of serious conflicts of interest.
In the first case, an assistant deputy minister even went so far as to evoke memories of the “funding sponsorship scandal”. The case comes from a hitherto little-known foundation (Sustainable Development Technologies Canada, or SDTC), responsible for redistributing tens of millions of dollars per year to small and medium-sized clean technology companies (one billion dollars, at total, between 2021 and 2026).
At the suggestion of the chair of its board of directors, Annette Verschuren, SDTC increased funding for the hundred or so beneficiary businesses in 2020 and 2021, in order to help them get through the pandemic, at a cost of $40 million. “Free money,” worried the same assistant deputy minister at the Ministry of Innovation, Doug McConnachie. And among the lot, the firm NRStor, which Mr.me Verschuren, received $217,000.
The CEO of SDTC, Leah Lawrence, had the decency to leave her position. The Auditor General is investigating, as is the Ethics Commissioner. Innovation Minister François-Philippe Champagne suspended all new federal funding, ordered SDTC to implement reforms by the end of the year and demanded an investigation into allegations of human resources discrepancies brandished by around twenty whistleblowers. Mme Verschuren, however, remains in office despite everything, claiming that a legal opinion had cleared her of having to recuse herself.
Obviously, Mme Verschuren and the foundation could use a serious lesson in accountability. And the government must ensure that its money, even when administered by third parties, is somewhat supervised.
The ArriveCAN app saga is another example. The customs declaration computer tool cost $80,000 to design internally, but $54 million to bring to fruition. Of this sum, 11 million was paid to a single firm, GC Strategies: without a storefront, managed by two people, who subcontract the IT work externally, obviously pocketing a commission.
The app has been downloaded 18 million times and used by 60 million travelers. The government was of course forced to respond to the pandemic quickly. But at $1.1 million per use, it’s a high price to pay for the haste.
And this waste doesn’t stop there. A senior official responsible for the ArriveCAN file at the time is accused of having maintained close ties with one of the directors of GC Strategies. The latter and the companies Coradix and Dalian (which between them have received more than $400 million in ten years) are accused of inappropriate contractual practices by a fourth firm, Botler, which also did business with the Border Services Agency . The Auditor General is investigating, as is the Royal Canadian Mounted Police.
The Auditor General already estimated, last December, that Ottawa could have paid up to $32 billion in overpayments to businesses or individuals. Which would represent 15% of the 211 billion paid in pandemic aid. This was without counting — or having been able to examine — the millions of public funds granted to others, through other mechanisms, for two years. There is serious cause for concern that the present cases represent only a fraction of all this money.
Prime Minister Justin Trudeau defended himself, in the middle of a pandemic, from acting too quickly by relying on the good faith of the beneficiaries of public funds. There would still be time, once the crisis had passed, he assured, to check “if there are people or companies who have misused this aid”.
The time has now come not only for these checks, but above all for sanctions. Citizens’ confidence in this government and its sound governance of the State are at stake. Especially since Deputy Prime Minister Chrystia Freeland will try to advocate financial discipline in her economic update on Tuesday.