MPs grill federal green fund chair who took part in decision to grant her own firm $217,000

The chair of the board at a federal green fund has acknowledged that she participated in approving more than $200,000 in grants to her own company.

That news emerged from Wednesday's meeting of the House of Commons ethics committee. MPs on the committee had some pointed questions for Sustainable Development Technologies Canada (SDTC) board chair Annette Verschuren, who is also chair and chief executive officer of NRStor Inc., a Toronto-based energy storage firm.

As SDTC's chair, Verschuren participated in approving grants to NRStor totalling $217,000 in 2020 and 2021. The grants were part of the federal green fund's efforts during the COVID-19 pandemic to send money to companies with existing funding arrangements with SDTC.

SDTC is a federal foundation that provides more than $170 million per year in grants to small and medium-sized businesses in clean technology sectors.

Verschuren said she receives an annual salary of $120,000 from NRStor, in addition to her remuneration for her role at SDTC.

Questioned by MPs, she said she didn't have to recuse herself from the grant decision because NRStor was part of a group of about 100 companies that received the same levels of additional funding from SDTC during the COVID-19 pandemic.

"I took the advice from my lawyer," Verschuren told MPs on the committee. "I received legal advice and I think that was the proper approach."

Verschuren said her company did not receive "preferential treatment" because SDTC provided nearly $40 million in special payments during the pandemic.

"We were very afraid that we were going to lose the investments that we made, and the jobs," she said.

SDTC is in turmoil after being targeted last month by a whistleblower complaint and a report that found problems with governance and management of public funds at the foundation.

Several MPs criticized Verschuren for getting involved in the decision to give grants to NRStor.

MP claims company received 'preferential treatment'

NDP MP Matthew Green said her decision constitutes "at the very least a perceived conflict of interest, if not a very real one."

"Could you not appreciate why the perception to the public, the taxpayers who are watching this, hearing the discrepancies in that line of reasoning, would see this as a problem?" he asked Verschuren.

Green said her testimony "raises more questions than it does answer."

Conservative MP Michael Cooper described the situation as "incredible."

"Your company received preferential treatment, in the sense that you sat on the board and provided money to it," he said.

Liberal MP Pam Damoff said that with her decades of experience in the business world, Verschuren should have known better.

"Common sense to me would dictate that you would question the legal advice and, out of purely best practice, recuse yourself from that," she said.

Verschuren, the former president of Home Depot Canada, insisted she is satisfied with her actions.

"It was considered an operational issue," she said.

The ethics committee also heard testimony from Doug McConnachie, an assistant deputy minister at Innovation, Science and Economic Development (ISED) who oversaw the handling of the whistleblower complaint against SDTC this year.

'There's a lot of sloppiness and laziness'

In his opening speech to the committee, he railed against the fact that the whistleblowers recorded their conversations with him without his knowledge and provided the tapes to Radio-Canada.

"I was extremely naive to expect that my good-faith conversations with the complainant would remain private," McConnachie said. "I never expected my remarks to be used out of context to reinforce a narrative that is not supported by independently verified facts.

"I was too transparent, too trusting and I deeply regret any impact this has had on the government, SDTC and ISED."

In a conversation with the whistleblowers that was recorded earlier this year and made public, McConnachie criticized SDTC's management several times.

"There's a lot of sloppiness and laziness. There is some outright incompetence and, you know, the situation is just kind of untenable at this point," he said on the recording.

'The minister is going to flip out'

In a conversation with a whistleblower at the time, McConnachie predicted a fiery reaction from Industry Minister Francois-Philippe Champagne once he was briefed on the SDTC report.

"The minister is going to flip out when he hears the stuff and he's going to want an extreme reaction, like shut it all down," predicted McConnachie.

At the end of July, McConnachie criticized SDTC's decision to award nearly $40 million in grants during the pandemic.

"It was free money," he said, comparing it to the controversy that damaged Jean Chrétien's Liberal government in the early 2000s. "That is almost a sponsorship scandal-level kind of giveaway."

On Wednesday, McConnachie told MPs his comments did not represent the views of other officials who worked on the file.

"I was baited into making these speculative and inappropriate remarks," he said.

In their own testimony before the committee, senior SDTC executives attacked the credibility of the government's investigation of the whistleblower complaint, which was led by Raymond Chabot Grant Thornton (RCGT).

According to SDTC president Leah Lawrence, the firm ignored key information and made numerous errors when writing its report.

"Our organization has played by the rules, improved the rules, and achieved results for Canadians. My leaders have acted ethically at all times. I stand behind our track record. I'm proud of it. I am proud of the companies we've helped to succeed," she told MPs.

She added that while there's room for improvement at SDTC, the investigation did not reveal any cases of misconduct.

SDTC has been directed by the federal government to implement a series of reforms and resume funding companies in clean tech sectors.

The Office of the Auditor General announced last week that it has launched its own investigation into the foundation's management of public funds.