WE Charity controversy

The WE Charity controversy is an ongoing political scandal that involves the awarding of a Government of Canada contract to the WE Charity in order to administer the proposed Canada Student Service Grant program. WE Charity had previously paid the mother and brother of Prime Minister Justin Trudeau in excess of $300,000.[1][2] The charity has also "covered hundreds of thousands in expenses"[3] for the Prime Minister's wife, who accepted them while volunteering with the charity in an unpaid position.

Former Finance Minister, Bill Morneau was also found to have accepted travel expenditures and vacations paid for on behalf of the WE Charity, one of which was retroactively reimbursed by Morneau over the course of the controversy.[4] Additionally, one of the Finance Minister's daughters was found to be directly employed by the charity; while another daughter spoke at multiple WE Charity events and was featured in WE’s “Future 50” portrait series. [5][6][7]

As of 16 August 2020, the Ethics Commissioner was investigating whether Trudeau and Morneau violated the Conflict of Interest Act.[8] The contract has since been cancelled.

Early events

In 2020, the federal cabinet selected WE to administer a payment program for the Canada Student Service Grant program, a $900 million volunteer program, for a contract worth up to $43.53 million.[9][10][11] The decision raised questions about the charity's ties to the Trudeau family and why the federal public service could not administer the funds as part of their regular mandate; despite statements made by a leading federal workers union that it was fully capable of doing so.[12] Conservative MP Dan Albas raised concerns about accountability, stating that the private charity could not be audited by the Auditor General of Canada.[13] Previously, the charity had received $120,000 in at least five federal government contracts and $5.2 million in grants and contributions under the Trudeau government from 2017 to 2020.[14]

Co-founder of Democracy Watch Duff Conacher expressed concerns over the relatively sudden and large amount of funding for an organization for which the Prime Minister's wife, Sophie Grégoire Trudeau, was a high-ranking volunteer. Volunteer Canada, a national volunteer group, rejected the fund, saying that it would pay volunteers less than minimum wage and would be against the law. Craig Kielburger - the charity's co-founder - called the program a way to hire students at a discount rate while calling the program a "grant."[15] The charity itself offered 450 virtual volunteering positions as part of the program, further raising concerns of a conflict of interest.[16]

Prime Minister Justin Trudeau defended the government's initial decision to have WE Charity administer the program, saying that the organization's networks across the country made it the right choice and WE Charity itself would not profit from the contract.[10] On July 3, 2020, Liberal Minister of Diversity and Inclusion and Youth, Bardish Chagger, announced that WE Charity would no longer be administering the Canada Student Service Grant program, per a "mutually agreed upon decision" between the organization and the federal government,[17][18] and that WE Charity would return any funds that had been received.[17] While it was initially characterized as a mutual decision, Trudeau later said that it was a decision made by WE that the government supported.[19] In a statement, WE founders Craig and Marc Kielburger confirmed that the decision to cancel the contract was mutual between their organization and the federal government, saying that while they regretted the controversy that threatened to overshadow the program's intent, they felt the government had entered into the contract in good faith, and that they "wish the program all the best of continued success."[20]

Timeline

On April 9, 2020 WE Charity sent an unsolicited proposal to the federal government, specifically the offices of Youth Minister Bardish Chagger and Small Business Minister Mary Ng, regarding a program that would seek to award youth and students monetary grants for the purpose of entrepreneurship. We Charity has repeatedly stressed that this unsolicited exchange was “distinct and clearly unrelated” to the later proposals. [21]

On April 19, 2020 Rachel Wernick, a senior government official, made a phone call to Craig Kielburger to discuss youth programs.[22]

On April 22, 2020, The Federal Government of Canada announced a series of measures and future measures to be undertaken to address the impact of the ongoing COVID-19 pandemic on the student population of Canada. Among these, were plans for a program that would seek to compensate students for volunteer work; awarding up to a $5000 bursary for volunteer work.[23]

On June 12, 2020 Marc Kielburger, co-founder of WE Charity, was recorded in a zoom call with youth leaders stating that the Prime Ministers Office had contacted WE Charity directly earlier in April to discuss the administration of the program. This statement was declared a fabrication by Kielburger himself, who later clarified "Speaking loosely and enthusiastically, I incorrectly referred to the Prime Minister's Office. In fact, the outreach came from unelected officials at Employment and Social Development Canada."[24]

On June 25, 2020, The Federal Government of Canada announced the Canada Student Service Grant program through the Prime Minister's Office. [25]

On June 30, 2020, The Federal Government of Canada paid $30,000,000 to WE Charity Foundation to administer the program. [26][27] We Charity Foundation is a separate entity from WE Charity. [28]

On July 3, 2020, the Ethics Commissioner announced an investigation into Trudeau and the decision to have WE Charity administer the program.[29][30] It was later revealed that Trudeau's mother Margaret and brother Alexandre received $250,000 and $32,000, respectively, for speaking at WE events between 2016 and 2020.[31] Additionally, Sophie Gregoire Trudeau, the wife of the Prime Minister, was also found to have been involved with the charity prior to the controversy.[32]Two of the daughters of Minister of Finance Bill Morneau were found to have worked in unrelated work for the charity, one in a paid contract position, and the other as an unpaid volunteer; Morneau did not recuse himself from the cabinet decision for the contract.[33] Opposition parties have called for a variety of actions including the release of documents related to the charity and for high-ranking Liberals to appear before Parliamentary committees; the Conservatives asked for an investigation by the RCMP.[34]

On July 9, 2020, Bloc Québécois leader Yves-François Blanchet suggested that Prime Minister Trudeau should step aside "for a few months" during the ethics investigation, and "leave responsibilities to the Deputy Prime Minister" Chrystia Freeland.[35] On July 16, 2020, during a press conference in Ottawa, Freeland stated that the Prime Minister has her "complete confidence" and that "all of us, everyone in our government, everyone in cabinet, bears responsibility for this situation."[36]

On July 16, 2020, Minister Chagger told a parliamentary committee that the Trudeau government had been willing to pay WE Charity more than $19.5 million if the Canada Student Service Grant program had been implemented, up to $43.5 million.[37][38] Chagger went on to say that she was not directed by the prime minister or his staff in suggesting that WE Charity run the program, reiterating that it was a recommendation by the non-partisan civil service.[39] In testimony delivered the same day, Rachel Wernick, the senior assistant deputy minister at Employment and Social Development Canada (ESDC), corroborated this claim saying that she had recommended WE Charity to administer the program, citing its far-reaching connections to youth and the scale and speed at which the program was to be delivered.[40] Wernick further explained that she made her recommendation because the public service was overburdened with responsibilities pertaining to the COVID-19 pandemic, and that while other charities were consulted and considered, the program had to be started quickly, and an open bidding process would have taken months.[40]

On July 21, 2020, Privy Council Clerk Ian Shugart backed up Wernick's statements supporting the prime minister's assertions, adding further that there was "no evidence" Trudeau had contact with WE Charity prior to the awarding of the contract,[41] and that the public service and cabinet did not flag any potential conflicts of interest with the program. Shugart went on to say that the public service administering the program would make it less comprehensive than if it had been facilitated through the third-party delivery mechanism originally proposed.[40] Shugart testified however that there were misgivings regarding the speed at which government was moving on these programs.

“With respect to how we made decisions and so on, a lot it was virtually, as committees are experiencing. Often at all hours of the day and night given the amount of business and the extent of impacts of the pandemic, people were pressed, people were tired, some public servants were doing their work but knowing it was not being called on, and other public servants were under pretty unrelenting pressure to deliver, the same is true for ministers. With respect to the substance I would say that none of us have been happy with the speed at which analysis had to be undertaken, in fact, we conveyed informally, as did the former government during the financial crisis, to the office of the auditor general. That we anticipated that there would be mistakes…” Clerk of the Privy Council Ian Shugart[42]

On July 22, 2020, Minister of Finance Bill Morneau testified at the Standing Committee on Finance that he recently repaid WE Charity $41,366 for expenses incurred by WE for trips his family took to Kenya and Ecuador in 2017.[43][44] Morneau said the repayment was done after "a thorough review" of his records, and that "this should've been something that we rectified sooner. It was absolutely an error. In looking through my records, I was completely surprised by the situation."[44]

On July 27, 2020, media reports revealed that based on documents shared with the Finance Committee, while the $900 million figure originally reported was a maximum budget for the program, officials had drawn up a plan with WE Charity to spend only about half that amount.[45] Additional documents supported the government's claims that the civil service had evaluated several other nonprofits, including Colleges and Institutes Canada, the United Way and Canadian Red Cross, before recommending WE Charity. Officials at some organizations however said they were never contacted to discuss the program despite indications that they had been.[46] Peter Dinsdale, president and CEO of YMCA Canada, said that "At no point did the government contact YMCA Canada about delivering that program. He added that his organization "absolutely" would have been capable of administering the program."[47]Speaking to CTV News, Dinsdale stated that in light of the ongoing pandemic "It would have been tough given the state of YMCAs across the country, given the impact of COVID — really fighting for basic survival. In normal times, [this] 100 per cent would have been something we could have done."[46] In addition to YMCA Canada, the Canadian Wildlife Federation, United Way, Chantiers Jeunesse, 4H Canada, and the Boys and Girls Clubs of Canada all said the government never contacted them about the CSSG — despite all of the organizations' names appearing on the government's list of groups it considered to deliver the program.[46]

On July 28, 2020, Michelle Douglas, former chair of WE Charity's board, testified before the House of Commons finance committee.[48][49] Douglas had resigned in March 2020, saying publicly that she did so due to "concerning developments" at the charity.[48] She told the committee that during her tenure as chair, WE Charity's board made specific inquiries and were told that speakers were not being paid for appearing at We Day events.[49] Douglas said she resigned because the organization refused to provide the board with financial documents or access to its chief financial officer, Victor Li, when the board was reviewing mass layoffs at the organization.[50] Asked whether she concurred with the government's assertions that WE Charity was the only organization that could deliver the program at the intended scale and capacity, Douglas said that she could not speculate on that prospect because she had resigned months before the contract was awarded.[49] Responding to concerns that WE Charity benefited from a close relationship with the federal Liberals, she went on to say that the board of directors considered WE Charity to be "non-partisan."[49]

Craig and Marc Kielburger also testified before the finance committee on July 28.[49][51] The brothers asserted that they did not stand to gain financially from running the program nor did they exploit their ties with the Trudeau family to secure the deal.[49] Asked how "close" their relationship was with the Trudeaus, Craig Kielburger said that neither he nor his brother have ever "socialized" with the prime minister, his wife, his mother or his brother, going on to say that they only invited Sophie Gregoire Trudeau and Margaret Trudeau to take part in wellness programs because of their history of mental health advocacy.[49] They added that elected officials of all political parties at all levels of government had participated in and sponsored WE Charity events, including former Alberta NDP premier Rachel Notley and Laureen Harper, wife of former Conservative prime minister Stephen Harper, who had hosted a reception for them at 24 Sussex Drive in 2013.[52] The brothers also reiterated that it was a member of the civil service who had reached out to them to discuss the program and that they had mistakenly identified the contact as being from the prime minister's office.[52] Craig Kielburger said that he regretted their team having answered the phone call from the civil service and that they did not foresee the escalating consequences that would arise as a result.[52]

On July 30, 2020, Trudeau and his chief of staff, Katie Telford, testified before the finance committee.[53] In his opening statement, Trudeau said that he was not aware that the public service had chosen WE Charity to administer the program until a briefing on May 8.[54] He expected the preexisting Canada Student Service Corps to deliver it but was informed that they would not be able to do so at the scale and capacity required, in the rapid timeframe in which aid programs were being delivered during the pandemic.[55] He again apologized for not recusing himself from cabinet discussions but reiterated that there was "absolutely no preferential treatment," nor direction or influence, from him or his office in selecting WE Charity to administer the Canada Student Service Grant.[54] He went on further to say that the public service told him that the choice was between having WE Charity administer the program or having no program at all.[54][56] The same day, Liberal MP Wayne Long released a public letter in which he criticized the government's decision-making process and called for full transparency and reform in the PMO and government more broadly to prevent "a systemic failure" in the future.[56]

Also on July 30, 2020, the Public Service Alliance of Canada, a union representing federal workers, issued a statement condemning allegations made on July 21, that the public service was unable to administer the program. In its concluding remarks, the statement read "Finally—and let me conclude—if the government had either used existing programs or asked the public service to set up a new student work and payment plan, it would have avoided the conflict of interest issues that have come to light since the WE Charity announcement, and it would have been able to deliver both pay and work experience to students."[57]

On July 31, 2020, the Government of Ontario announced that it would not be renewing an existing contract the province had with the WE Charity. Although the government did not specify which contract it was cancelling, the Charity was set to administer WE Schools, a $250,000 year-long education program. In a statement to media, the Ministry of Education stated that it “has been directed to not renew the contract with WE and to investigate the expenditures to date.”[58]

On August 11, 2020, WE Charity announced through a spokesman that it had returned $22 million of the $30 million it had received earlier on June 30, and was "waiting on the government to accept the remaining $8 million...".[59]

On August 17, 2020, Bill Morneau resigned as Finance Minister and Member of Parliament for Toronto Centre.[60][61]

On August 18, 2020, Prime Minister Trudeau asked the Governor General of Canada Julie Payette to prorogue Parliament until September 23 to present a new Speech from the Throne with an updated vision and priorities in light of the COVID-19 pandemic in Canada.[62][63] Opposition leader, Andrew Scheer, characterized the prorogation as the government "hiding out" during political controversy.[64] Conservative finance critic, Pierre Poilievre, tweeted that opposition members were demanding access to thousands of pages of documents concerning the controversy before Parliament is prorogued.[64] Trudeau said that the government has released numerous documents that were previously requested by the Opposition, and that opposition members could review them while Parliament is prorogued.[64][65]

See also

  • List of Canadian political scandals and controversies

References

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