WHERE’S THE MONEY?
For reasons not disclosed, WE Charity received a $30M advance payment from Employment and Social Development Canada (ESDC) in connection with the contribution agreement to administer the Canada Student Service Grant (CSSG) program.
The government has not confirmed repayment.
Questions regarding the program began almost immediately following the announcement on April 22nd by Prime Minister Trudeau of a $9-billion student aid package, which contained CSSG.
WE received payment(s) from the government amounting to $30M (for yet unspecified purposes)
While the contribution agreement with WE was not approved until June 23rd, WE started work on May 5th. According to testimony from Trudeau Chief of Staff Katie Telford before the Finance Committee, an unnamed official in the PMO spoke with WE on May 5th (in what must have been an interesting call), following approval of WE by the COVID-19 Cabinet Committee (on the basis of a recommendation from Youth Minister Bardish Chagger).
The PM testified however that he didn’t hear about WE in connection with CSSG until May 8th.
Cabinet approval was given on May 22nd, and the public service began negotiating an agreement with WE the following day…eighteen days after WE started work.
It was reported that although the contract was signed on June 23rd, it came into effect on May 5th (before the PM heard about it). If this sounds like complete nonsense, the “backdating” of contracts is generally permissible under Canadian Law…but not however for the purpose of misleading third parties (such as the public) or to circumvent Rules or Legislation (such as the requirement for Cabinet approval).
In the wake of growing controversy regarding conflict of interest and another investigation by Ethics Commissioner Mario Dion, cancellation of the WE agreement was announced on July 3rd.
Public confusion is forgivable here. The timeline is convoluted, but critical.
Somewhere between May 5th and July 3rd – and we can only assume that both the Ethics Committee and the Finance Committee will investigate transaction dates in order to determine whether any payments were made prior to signing the contract on June 3rd – WE received payment(s) from the government amounting to $30M (for yet unspecified purposes).
Where is the money now?
Appearing before the Ethics Committee Aug 11th, Chagger could not say how much of the $30M has been repaid by WE since the contract was finalized; “We can share that … $30 million has been released to the organization through the contribution agreement. I was not aware of how much money has been returned,” As Minister of Diversity, Inclusion and Youth, Chagger was responsible for CSSG.
Non-Liberal committee members, and many Canadians, were surprised to learn that Chagger didn’t know how much money had been recouped…and that it wasn’t a higher priority.
Conservative MP Michael Barrett asked, “Why hasn’t the money been returned at this point? That seems odd. It’s been quite some time since the program was cancelled or that WE withdrew…” Chagger responded, “We want to ensure that all processes are being followed. So, I can assure you that the public service is working with the organization to ensure that it is returned.”
According to a Global News article on Aug 11th, WE issued a statement saying that they have repaid $22M of the $30M handed out when the contract was signed, and have been waiting on the government to accept the remaining $8M…whatever that means. A WE spokesperson said, “WE Charity has repeatedly communicated to ESDC the desire to return the remaining funds as soon as the government is able to accept the transfer.” They did not elaborate as to why they hadn’t returned the full amount immediately, or why the government was having difficulty accepting the outstanding balance.
Due diligence has been one of many glaring anomalies with respect to WE-Gate, with questions regarding WE’s financial health.
In testimony before the Finance Committee, Kate Bahen of watchdog Charity Intelligence Canada, outlined how she used easy-to-access financial data to report that WE Charity had financial stress, “At August 2019 year-end, WE Charity had cash and investments (gross funding reserves) of $11.5m compared with $14.0m at year-end August 2018. WE Charity’s bank loans increased to $13.7m in 2019 compared with $11.1m in 2018. This creates a negative funding reserve of $2.2m. For the second year, WE Charity is in breach of its financial covenants on its bank debt. Its bank has waived these conditions for the current period.”
With the $1 trillion debt that the Liberals have incurred, Canada has already emptied the national piggy-bank…and every penny counts
This would be the point where the loans officer at your local bank branch stops returning your calls.
A cursory review of WE’s 2018 Audited Financial Statement should have raised red flags.
Alarmingly, clerk of the Privy Council Ian Shugart admitted that federal officials did not probe WE Charity’s financial situation or governance structure when doing homework on the $912-million deal.
It has also come out that the WE agreement was actually made with the WE Charity Foundation, a private company owned by WE founders Marc and Craig Kielburger, not WE Charity. The foundation has no employees or assets, other than WE Charity. Since the payment was made to what is effectively a holding company, recovery of the funds could prove problematic.
It is incumbent upon the Government to inform Canadians what the status of the $30M is exactly, and when it will be fully repaid. If $22M has indeed been repaid, the government needs to say so, and recover the remainder owed.
With the $1 trillion debt that the Liberals have incurred, Canada has already emptied the national piggy-bank…and every penny counts.
Where’s the money?