Whistleblower testifies about ‘gross mismanagement’ at federal green fund

Daniel Leblanc · CBC News

· Posted: Dec 12, 2023 10:45 AM EST | Last Updated: 8 hours ago

A federal green fund ignored numerous complaints of mismanagement and a toxic work environment before Ottawa intervened and suspended its funding this fall, a whistleblower testified in front of a parliamentary committee Monday evening.

The former employee of Sustainable Development Technologies Canada (SDTC) testified openly in front of the industry committee of the House, on the condition that his name not be mentioned. As he testified openly, his image can be used.

According to this witness, tens of millions of dollars in public funds were misspent by the federal foundation, which funds small and medium-sized businesses in the clean tech sector.

He said employees had raised numerous questions over the years about breaches to the conflict of interest policy, favouritism at the senior management level and “gross mismanagement” of public funds.

According to the whistleblower, these allegations were ignored within SDTC until a group of current and former employees, of which he is a member, denounced the situation to the government at the beginning of this year. 

“[The complaints] were never taken seriously and were always swept under the rug,” the former employee said.

After receiving the whistleblower complaint, the department of Innovation, Science and Economic Development (ISED) commissioned an inquiry by Raymond Chabot Grant Thornton. The report released in October validated a number of allegations raised by whistleblowers.

The whistleblower worked at SDTC from 2020 to 2022. He said he left the organization voluntarily and that unlike several of his former colleagues, he was not bound by a non-disclosure agreement that would have limited what he could have said about his former employer.

“I am not a disgruntled employee,” he said, adding that he believed in the mission of the foundation.

The former employee said several human resources managers have been fired from SDTC over the years and have never been able to adequately respond to employee complaints.

During his testimony, this former employee raised many questions about nearly $40 million in special payments that were made during the COVID-19 pandemic to companies with pre-existing funding agreements with SDTC.

He said SDTC had determined in 2021 that the vast majority of these companies had enough money to survive the consequences of the pandemic on their activities.

“The companies did not need it,” he told MPs about nearly $20 million in funding that was approved in 2021.

He said he believes SDTC spent this money in 2020 and 2021 to allow certain senior executives to meet their performance targets and receive year-end bonuses.

According to its funding agreement with ISED, SDTC will receive $1 billion to fund companies in the field of clean technologies between 2021 and 2026. 

Following the release of the report by Raymond Chabot Grant Thornton, SDTC has been hit with the resignations of the chair of its board of directors, Annette Verschuren, and its CEO, Leah Lawrence.

Verschuren was criticized for having participated in the approval of funding from SDTC to her own company in 2020 and 2021.

To deal with HR complaints, Ottawa has hired the law firm McCarthy Tétrault to study allegations of workplace misconduct within SDTC.

In addition, the Office of the Auditor-General has launched its own investigation into SDTC. 

The government suspended SDTC’s ability to fund new projects in October, pending the implementation of corrective measures in response to the report by Raymond Chabot Grant Thornton. Innovation Minister François-Philippe Champagne said he will wait for the report by McCarthy Tétrault before deciding on the next steps for SDTC.