The industry minister announced federal green fund programs are being transferred under a government agency after the release of an auditor general report, but the department has not clarified the fate of the fund.

Auditor General Karen Hogan released a report on the Sustainable Development Technology Canada (SDTC) federal foundation on June 4. It identified 90 breaches of conflict-of-interest rules among the entity’s leadership, with directors approving money for their own businesses.
Industry Minister François-Philippe Champagne said the auditor general’s review and others have revealed “serious weaknesses in SDTC’s governance.”

The minister announced SDTC programs are being transferred to the National Research Council (NRC), an agency under his department specialized in science and technology research.

Mr. Champagne said SDTC is resuming its funding of projects under a “reinforced” contribution agreement with his department. STDC employees will be offered a chance to become federal public servants and work at the NRC.

Asked several times if this means SDTC will be dissolved and under what timeframe, ISED did not have an answer.

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“It is expected that the transition of SDTC to the NRC will span several months,” spokesperson Hans Parmar told The Epoch Times in a statement.

SDTC did not immediately respond to a request for comment.

The arms-length foundation’s mission is to fund companies involved in the clean tech sector.

Ms. Hogan’s report found “significant lapses” in the governance and stewardship of public funds at SDTC, with $59 million being awarded to ineligible projects. Another $20 million was given to projects which were not properly screened. Directors of the board also approved $76 million for projects they had links to.

Innovation, Science and Economic Development Canada (ISED), which oversees SDTC, had known about the irregularities since early 2023 and announced a suspension of new funding that fall.

The foundation was established by an act of Parliament in 2001, which has a clause on the winding-up of operations. It says that if the foundation is wound up or dissolved, its property is to be distributed among the foundation’s recipient of funds who are still carrying on approved projects.

Ethics Probes

Two former directors of SDTC, Annette Verschuren and Guy Ouimet, are currently under investigation by the ethics commissioner for having approved money for their own companies. The review is expected to be concluded in August.

Ms. Verschuren said the move had been cleared by an internal legal opinion and that the money had been approved as a blanket COVID relief payment to all SDTC portfolio companies.

Auditor General Hogan said in her report that this violated rules related to conflict-of-interest and the contribution agreement, which does not allow for blanket payments.

Former SDTC CEO Leah Lawrence told a House of Commons committee in January she had warned then-industry minister Navdeep Bains that appointing Ms. Verschuren as board chair was problematic because her company was funded by SDTC.

“I expressed concern there was a potential for both conflict of interest and the perception of conflict of interest,” she said. “I expressed concern that Ms. Verschuren and SDTC could potentially be damaged by the appointment.”

Mr. Bains, who now works in the private sector, testified on the matter before the House industry committee on June 5.

Tory MP Rick Perkins asked Mr. Bains if he was aware of the two names he had provided to replace then-SDTC board chair Jim Balsilie, including that of Ms. Verschuren, had a conflict of interest.

“I don’t recall the specific conversation you’re alluding to,” said Mr. Bains, noting there had been more than 100 Government-in-Council appointments during his tenure.

“All designated public office holders have an obligation to hold themselves to a certain standard, and with respect to Ms. Verschuren, her credentials were well-known,” said Mr. Bains. “She received the Order of Canada, she’s an individual that was well respected in the clean tech sector.”