Deal with WE paid less than budget, docs show, as Trudeau to testify Thursday

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This article was published 26/07/2020 (1616 days ago), so information in it may no longer be current.

OTTAWA – The federal government agreed to pay no more than $543.5 million as part of a deal to have the WE organization run a student-volunteer program that was budgeted to spend hundreds of millions more.

Most of the money — $500 million — was budgeted for grants to students who took part in volunteer opportunities.

The remaining $43.53 million was to go to the WE organization itself for running the program, which the Liberals have described as having a budget of $900 million.

The agreement signed in late June with WE Charity Foundation, which charity records with the Canada Revenue Agency show was registered in January 2019, required the organization to create up to 40,000 placements.

The deal also required the organization to get outside groups to provide service opportunities for students facing a summer without work because of the COVID-19 pandemic, potentially creating an additional 60,000 placements.

The federal government has said the program has a budget of up to $912 million, listing it as such in all its public spending documents. Ian Shugart, clerk of the Privy Council, told the finance committee last week that the $500 million was to be the first tranche of money.

The program is supposed to provide grants of $1,000 for every 100 hours of volunteering, up to a maximum of $5,000 as part of a government aid program to help defray the cost of school in the fall.

It has yet to launch.

The most recent filing the Finance Department provided to the MPs noted students can apply for placements until Aug. 21, and need to complete their hours by Oct. 31 to receive a lump-sum payment.

The agreement is dated June 23 and was scheduled to run until the end of March 2021.

A copy of the agreement with WE was filed with the House of Commons finance committee, which met Monday afternoon to figure out the details of Prime Minister Justin Trudeau’s planned testimony.

Trudeau and his chief of staff Katie Telford have agreed to appear before the committee as part of a parliamentary probe into the Liberal government’s aborted deal with the WE organization.

They are scheduled to do so Thursday afternoon.

WE backed out of the program in early July, citing the controversy over the Liberals’ handing the organization a sole-sourced deal, despite its ties to Trudeau and Finance Minister Bill Morneau.

WE also agreed at the time to repay any money it was given. Under the terms of the agreement, that would have been $19.5 million upon signing the deal.

The organization said Monday the payment was made on June 30, having started work on the program on May 5. That was the same day Youth Minister Bardish Chagger went to a special COVID-19 cabinet committee with the recommendation to go with WE for the program.

WE said it is still working out the details of repayment with the government.

The group also said it used WE Charity Foundation — an entity that “never previously operated nor held any funds or assets” — to run the program to “limit liability” and protect WE Charity’s assets.

There is also a provision for additional payments on July 2, which was the day before WE publicly said it was handing the program back to the government.

The program has been all but frozen since, with the department in charge saying it’s working on a transition plan.

The controversy hasn’t abated. The federal ethics commissioner is probing whether Trudeau and Morneau violated conflict of interest rules for not recusing themselves from discussions about WE.

Both have apologized, saying they should have recused themselves from talks. Trudeau because the organization has paid his mother, brother and wife speaking fees over the years totalling some $300,000; for Morneau, it was due to his daughters’ ties to the organization, including one who works in an administrative wing.

Morneau testified before the committee last week and told MPs he had cut a $41,366 cheque to WE earlier in the day for travel expenses the group covered for trips he and his family took three years ago.

Shortly after that, Trudeau accepted an invitation to testify, setting up a rare prime ministerial appearance at a House of Commons committee.

He is scheduled to testify for one hour, with Telford following for a second hour.

WE co-founders Craig and Marc Kielburger and former WE Charity board chair Michelle Douglas are scheduled to testify before the committee on Tuesday afternoon,

The organization’s chief financial officer Victor Li, one of the signatories to the contribution agreement, is now expected to testify next week.

The Kielburger brothers, who founded the organization two decades ago, said in a statement that they wanted to testify before the committee to set the record straight about the Canada Student Service Grant program.

The finance committee decided on Monday to have the Kielburgers testify for four hours, either all at once on Tuesday, or spread evenly over two days.

Much of the committee meeting was spent haggling over the scope of the parliamentary probe, including the number of witnesses to call.

This report by The Canadian Press was first published July 27, 2020.

Note to readers: This is a corrected story. A previous version said July 2 was the date the WE organization announced it would no longer administer the Canada Student Service Grant.