Sustainable Development Technology Canada (SDTC) was established as a non-profit foundation in 2001 to encourage the development of green, environmentally friendly technologies. The federal government was the main source of funding, most recently under the authority of the Minister of Innovation, Science and Industry (“the Department”), and subject to the constraints and objectives of related funding agreements.
In February 2023, in response to allegations of financial mismanagement and poor human resource mismanagement, the Department hired an external consultant to conduct an investigation. Subsequently, the Department hired a law firm to review the results of this investigation and to undertake appropriate action to resolve issues.
The organization also attracted the attention of the Office of the Auditor General (OAG), who conducted an investigation in parallel with the law firm review. The OAG report follows:
“Sustainable Development Technology Canada (legally, the Canada Foundation for Sustainable Development Technology) is a federally funded arm’s-length foundation created in 2001 and operated as a not-for-profit corporation. Its mandate is to award funding for eligible projects carried on primarily in Canada to develop and demonstrate new technologies related to climate change, clean air, clean water, and clean soil in order to make progress toward sustainable development.
“Since its inception, the foundation has entered into contribution agreements with the Crown, most recently, the Minister of Innovation, Science and Industry, to manage the Sustainable Development Technology Fund. According to these contribution agreements, the fund’s goal is to advance clean technology innovation in Canada, specifically by funding and supporting technology projects at the pre-commercial development and demonstration stages.
“In February 2023, Innovation, Science and Economic Development Canada received allegations of financial mismanagement and poor human resource management practices at the foundation.
“In March 2023, the department hired an external consultant to conduct a fact-finding exercise to determine whether there were sufficient facts to support a subsequent investigation. The report, completed in September 2023, identified inconsistencies and opportunities to improve practices related to governance, conflict of interest, compliance with the contribution agreements, and human resources.
“In November 2023, the department announced that a law firm would be hired to review alleged breaches of labour and employment practices and policies. This review was ongoing at the time that we completed our audit.”
“Overall, we found significant lapses in Sustainable Development Technology Canada’s governance and stewardship of public funds. The foundation awards funding to support new technologies that promote sustainable development under 4 streams—Start-up, Scale-up, Ecosystem, and Seed. For its part, Innovation, Science and Economic Development Canada did not sufficiently monitor the compliance with the contribution agreements between the foundation and the Government of Canada.
“We found that the foundation awarded funding to projects that were ineligible, that conflicts of interest existed in some instances, and that certain requirements in the Canada Foundation for Sustainable Development Technology Act were not met.
“We found that the foundation awarded funding to 10 ineligible projects of 58 we examined. These 10 projects were awarded $59 million even though they did not meet key requirements set out in the contribution agreements between the government and the foundation. In addition, we estimated that 1 in 10 of the remaining Start-up and Scale-up projects approved during our audit period were also ineligible.
“Also, according to the minutes of the meetings of the foundation’s board of directors, we found 90 cases that were connected to approval decisions, representing nearly $76 million in funding awarded to projects, where the foundation’s conflict-of-interest policies were not followed.
“The board of directors of Sustainable Development Technology Canada did not ensure that the foundation complied with its enabling legislation. The act requires that the foundation have a member council of 15 members. The board of directors supported reducing that number to 2. Members played an important role in representing Canadians and appointing directors to the board to oversee the foundation.”
- “Eight Start-up and Scale-up projects, totalling $51 million, did not meet eligibility criteria. For example, some projects did not support the development or demonstration of a new technology, or the projected environmental benefits were unreasonable.
- “We estimated that 1 in 10 of the remaining 168 Start-up and Scale-up projects approved during our audit period, or 16 projects, were ineligible.
- “Two Ecosystem projects, totalling $8 million, were ineligible because they did not fund or support the development or demonstration of a new technology.
- “The board approved $20 million for Seed projects without completing screening and assessments required by the contribution agreements with the government.”
As a result of the noted concerns, and following the release of the OAG report, the Department transitioned SDTC programs to the National Research Council of Canada (NRC). Programming under NRC IRAP will continue to provide critical support for Canadian cleantech companies.
With allegations of concern, as said, involving possible improper disbursements of many millions of dollars of public funds, and particularly upon consideration of the OAG report, opposition parties took note, as they properly do.
They proposed that the matter be referred to the RCMP in case criminal prosecution is warranted, and accordingly moved a motion to require in the name and authority of the House, that all relevant documents be collected and delivered to the RCMP.
Pursuant to Standing Order 81(16), the House proceeded to the putting of the question on the main motion, as amended, of Mr. Scheer (Regina—Qu’Appelle), seconded by Mr. Perkins (South Shore—St. Margarets)
That the House order the government, Sustainable Development Technology Canada (SDTC) and the Auditor General of Canada each to deposit with the Law Clerk and Parliamentary Counsel, within 30 days of the adoption of this order, the following documents, created or dated since January 1, 2017, which are in its or her possession, custody or control:
- all files, documents, briefing notes, memoranda, e-mails or any other correspondence exchanged among government officials regarding SDTC;
- contribution and funding agreements to which SDTC is a party;
- records detailing financial information of companies in which past or present directors or officers of SDTC had ownership, management or other financial interests;
- SDTC conflict of interest declarations;
- minutes of SDTC’s Board of Directors and Project Review Committee;
- all briefing notes, memoranda, e-mails or any other correspondence exchanged between SDTC directors and SDTC management; and
- in the case of the Auditor General of Canada, any other document, not described in paragraphs (a) to (f), upon which she relied in preparing her Report 6—Sustainable Development Technology Canada, which was laid upon the table on Tuesday, June 4, 2024; provided that,
- the Law Clerk and Parliamentary Counsel shall promptly thereafter notify the Speaker whether each entity produced documents as ordered, and the Speaker, in turn, shall forthwith inform the House of the notice of the Law Clerk and Parliamentary Counsel but, if the House stands adjourned, the Speaker shall lay the notice upon the table pursuant to Standing Order 32(1); and
- the Law Clerk and Parliamentary Counsel shall provide forthwith any documents received by him, pursuant to this order, to the Royal Canadian Mounted Police.
The question was put on the main motion, as amended, and it was agreed to on the following division: YEAS: 174, NAYS: 148
Production of Documents
In accordance with subparagraph (h) of the House order, the Office of the Law Clerk and Parliamentary Counsel on an on-going basis provided updates on document production by the various affected entities:
“On June 11, 2024, the Clerk of the House of Commons sent letters to the Clerk of the Privy Council and Secretary to the Cabinet, the CEO of SDTC, and the Auditor General of Canada to inform them of the Order and to invite them to contact me to make the necessary arrangements for their submissions (see Annex A).
“At the outset, I note that the Order is an exercise of the House of Commons’ power to send for documents. This parliamentary privilege is rooted in the Preamble and section 18 of the Constitution Act, 1867, as well as section 4 of the Parliament of Canada Act. The power to send for documents is absolute and unfettered. It is a constitutional parliamentary privilege not limited by statute. As such, the House is not constrained by statutory obligations contained in legislation such as the Access to Information Act and the Privacy Act. I also note that the Order did not contemplate that redactions be made to documents or that information be withheld.”
Government Institutions
“The following government institutions provided me with unredacted documents in response to the Order:
- Finance Canada;
- Library and Archives Canada;
- Agriculture and Agri-Food Canada;
- Fisheries and Oceans;
- Canada Economic Development for Québec Regions;
- Women and Gender Equality Canada;
- Treasury Board of Canada Secretariat;
- Canada Energy Regulator;
- Environment and Climate Change Canada; and
- Office of the Privacy Commissioner.”
“The following government institutions provided me with documents containing redactions and/or informed me that they withheld documents purportedly relying on the Access to Information Act and/or the Privacy Act:
- Federal Economic Development Agency of Southern Ontario;
- Canadian Northern Economic Development Agency;
- Global Affairs Canada;”
- Prairies Economic Development Canada;
- Housing, Infrastructure and Communities Canada;>
- Canada School of Public Service; (Note: August 21 update)
- Atlantic Canada Opportunities Agency;
- Natural Resources Canada;
- Public Services and Procurement Canada;
- Canada Revenue Agency;
- Export Development Canada;
- Pacific Economic Development Canada;
- Innovation, Science and Economic Development;
- Business Development Bank of Canada;
- National Research Council Canada;
- Standards Council of Canada;>
- Social Sciences and Humanities Research Council of Canada;
- Communication Security Establishment Canada;
- Justice Canada;
- National Defence.”
“Canadian Heritage confirmed that they, as well as the Canadian Radio-television and Telecommunications Commission, the National Film Board and the National Battlefield Commission, do not have documents in their possession that are relevant to the Order. Shared Services Canada also confirmed they did not have such documents in their possession.
“The Public Sector Pension Investment Board sent a letter explaining it was not subject to the Order as it is not a government institution and did not provide any documents.”
“We have since received the remaining documents from Pacific Economic Development Canada, on July 12, 2024.
“Finally, the following government institutions advised that they could not provide all the documents in their possession that are relevant to the Order within the 30 days time limit. These government institutions committed to deliver the remaining documents in their possession at a later date:
- Finance Canada;
- Treasury Board of Canada Secretariat;
- Pacific Economic Development Canada;
- Innovation, Science and Economic Development;
- National Research Council Canada; and
- Justice Canada.”
“The letters I received from the different government institutions are reproduced at Annex B.”
Other Institutions
“On July 10, 2024, SDTC provided documents responsive to subparagraphs (b), (c), (d) and (e) of the Order. SDTC indicated they are still in the process of collecting and reviewing documents responsive to subparagraph (f) of the Order. The letter from SDTC is reproduced at Annex C.”
“On July 10, 2024, the Auditor General provided the Clerk of the House of Commons with a letter explaining that she would not provide any documents (Annex D).”
“On August 8, 2024, the Canada School of Public Service provided me with a letter accompanied with the same documents they provided my Office on July 9, 2024, but this time unredacted in their entirety. A copy of the letter I received is reproduced at Annex A.”
“On August 29, 2024, Innovation, Science and Economic Development (ISED) provided me with documents and indicated that these were the second of four tranches of documents to be submitted in response to the Order.
“On August 30, 2024, Justice Canada provided me with additional documents with redactions and indicated that the remaining documents were currently completely withheld.
“On September 12, 2024, Environment and Climate Change Canada provided me with additional documents in response to the Order.
“The letters I received from the different government institutions are reproduced at Annex A.
“On August 29, 2024, SDTC provided me with documents responsive to paragraph (f) of the Order. SDTC indicated that they had partially redacted some records and withheld others on the grounds of legal privilege. The letter from SDTC is reproduced at Annex B.
“On September 13, 2024, the Auditor General provided me with documents with the mention that other documents could be provided later. The letter from the Auditor General is reproduced at Annex C.”
“On September 25, 2024, the Department of Finance provided its second tranche of documents and, on October 10, 2024, provided its third and last tranche of documents.
“On October 3, 2024, Innovation, Science and Economic Development provided me with documents and indicated that these were the third of four tranches of documents to be submitted in response to the Order.
“On October 8, 2024, the Treasury Board of Canada Secretariat provided its final submission of documents in response to the Order.
“All three government institutions provided documents containing redactions and/or withheld some pages purportedly relying on the Access to Information Act. A copy of the letters I received are reproduced in the Annex.”
“On October 21, 2024, through Innovation, Science and Economic Development (ISED), Statistics Canada and National Research Council Canada (NRC) provided me with documents. NRC indicated that they would provide additional documents, as a final package, as soon as possible. I received the final tranche of documents from NRC, through ISED, on November 7, 2024.
“On October 23, 2024, ISED provided me with documents and indicated that these were the fourth tranche of their documents to be submitted in response to the Order, and were expediting the processing of a final tranche of documents to submit to me. I received the final tranche of documents from ISED on November 7, 2024.
“All three government institutions provided documents containing redactions and/or withheld some pages purportedly relying on the Access to Information Act. A copy of the letters I received are reproduced in the Annex.”
“On November 27, 2024, the Auditor General of Canada provided me with more documents belonging to Innovation, Science and Economic Development Canada, with the mention that other documents could be provided later. The letter from the Auditor General, including its attachments, is reproduced in the Annex.”
In accordance with subparagraph (i) of the House Order, the Office of the Law Clerk and Parliamentary Council on an on-going basis provided the received documents to the RCMP via USB keys.
Redactions and Documents Withheld
It appears that all the requisite organizations laboured concientiously to deliver the documents as ordered. There was some difficulty in delivering all the documents within the timeframe specified in the order, but there are reputedly in the vicinity of 30k documents, and the timeframe in the order was not necessarily well chosen nor practical.
In addition, a number of organizations either redacted or withheld some documents, which I believe was also concientious by all concerned, on the basis of such as solicitor-client privilege, Cabinet confidences, confidential business information, and personal information and the like, citing consitutional-rights concerns, or perhaps statutes such as the Access to Information Act and/or the Privacy Act.
In his July 17, 2024 notice to the Speaker, the Parliamentary Law Clerk and Parliamentary Counsel noted that “The power to send for documents is absolute and unfettered. It is a constitutional parliamentary privilege not limited by statute. As such, the House is not constrained by statutory obligations contained in legislation such as the Access to Information Act and the Privacy Act.”
He also notes that the order “did not contemplate that redactions be made to documents or that information be withheld.” Since the Order was indeed silent on the matter of redactions, one could argue that suitably justified redactions or witholdings would not necessarily conflict with the order.
In this case as well, the documents are not intended to aid any Parlimentary study or purpose. They are explicitly ordered solely for immediate delivery to a third party, i.e.: the RCMP. It is arguable that the intent of Parliament’s unconstrained privilege to call for documents is for the benefit of the Parliament itself, NOT for the purpose of delivering them to a third party, particularly an external one, nor to offer an end-run around statutes duly enacted by the Parliament.
Recommendation
This is unprecedented. It is unprecedented and I believe beyond the scope of the Parliament itself to resolve. I suggest that it needs a reference to the Supreme Court of Canada to determine whether this Order, calling for documents — not for the use of the Parliament itself but for the purpose of delivery to an external third-party — remains within the scope of Parliament’s constitutional privilege.
