The WE Charity scandal is being blown out of all proportion. That is not because it is a minor, forgettable indiscretion, as a flippant Prime Minister Justin (Mr. “Blind Spot”) Trudeau would have you believe. No, the WE scandal is every bit as bad as the critics say – and worse.
A brief recap. On June 25, the Liberal government announced it had awarded WE Charity a sole-sourced contract to administer a $912 million program whereby students who “volunteered” for charitable work over the summer would be paid between $1,000 and $5,000. For running this Canada Student Service Grant (CSSG) program, WE Charity stood to scoop up a $19.5 million fee. Almost nothing in this initial announcement was accurate.
On July 22, the government admitted the CSSG contract was not with WE Charity at all, but with an (until then) inactive real estate holding company, WE Charity Foundation. Most people in English-speaking Canada know WE Charity as the creation of the Kielburger brothers, Craig and Marc, who have made a career out of saving children in Third World countries. Very few, though, had ever heard of WE Charity Foundation.
When questioned about the arrangement by the House of Commons Finance Committee, the Kielburger brothers sloughed it off as a routine mechanism to limit liability for WE Charity. Of course, they assured MPs, WE Charity would do all the work for the CSSG program; the contract was with WE Charity Foundation simply because it has no assets, so that if something were to go awry the Kielburger brothers would not lose their shirts. Such a tawdry corporate shell-game might strike the average voter as strange for a charitable endeavour run by a widely admired duo long draped in a mantle of moralistic self-righteousness.
It turns out there are still more branches to the WE conglomerate. Many more. The Kielburger brothers also control ME to WE (a private, for-profit enterprise), WE Education for Children Limited, ME to WE Asset Holdings Inc. (which controls nearly $50 million worth of real estate in Toronto), WE Villages, WE Schools, and the ME to WE Foundation. The functions of these intertwined entities are difficult to decipher, but transparency is apparently not one of them.
The Finance Committee also discovered that the contract with WE Charity Foundation was not to administer a program worth $912 million, but only $500 million. Also, the WE conglomerate was actually in line to receive $43 million in administration fees, not $19.5 million – a hefty 8.6 percent admin rate for a few months’ work. But the biggest benefit might have been the opportunity to “hire” – at taxpayers’ expense – thousands of young “volunteers” to do WE work at less than minimum wage. Quite a coup for an outfit that started as a campaign against the exploitation of child labour.
The Liberals would like you to believe the WE scandal is the only game in town, and that its only problem was that Trudeau and his then Finance Minister, Bill Morneau, forgot to recuse themselves from the Cabinet decision-making over the contract award. But their failure to recuse, as offensive and illegal as it manifestly was, is among the least offensive aspects of the WE scandal.
“Unregistered” Lobbying: Better than the Regular Kind
The three Parliamentary Committees investigating the issue before they were shut down by Trudeau’s proroguing of Parliament have not yet uncovered the full details of how the CSSG program even came into being. What is apparent, though, is that it involved a great deal of unregistered lobbying by the WE conglomerate.
The Kielburgers claim they had approached the government in early April with a proposal to administer a “Social Entrepreneurs initiative” for the government, and that this proposal morphed into the CSSG program after some discussions with high-level public servants. But this narrative doesn’t make sense and isn’t consistent with the facts already known. To begin with, in August of last year the WE conglomerate had already been awarded $3 million to administer a Social Entrepreneurs initiative (which, going by the government press release itself, amounts to taxpayer-funded left-wing activism). Why would they be returning to Ottawa in April of this year for more money to do the same thing?
The original $3 million award raises questions of its own. What unregistered lobbying was done by WE’s various arms to obtain this sole-sourced contract? (WE have no registered lobbyists, claiming how they approach government is either not lobbying or is too inconsequential to be captured by the Lobbying Act. Perhaps that is a legal question for the authorities to sort out; ordinary folks would likely regard it as sleazy schmoozing.) Was there a conflict of interest in its having been awarded just before an election was called, arising from the fact that Craig Kielburger had been appointed by the Liberals to the Debates Commission, which would determine the rules around the official election debates? Does the ongoing cozy relationship between WE and Morneau not demolish Morneau’s claim he was not a friend of the organization or its founders? These questions still await official investigation.
Moreover, the Kielburgers’ schmoozing was not limited to members of the public service. There were also many communications with members of the Prime Minister’s Office (PMO), with Morneau and his staff, with Bardish Chaggar, the Minister for Youth who would ultimately be responsible for the CSSG program – and initially with Mary Ng, Minister for Small Business. These contacts would have been known to the public servants who were trying to please their political masters. It simply cannot be maintained with a straight face that the program was drafted and recommended to Cabinet by a disinterested public service working independently, purely in the national interest, free of any undue influence.
As with so many political scandals, the cover-up ends up being worse than the initial infraction(s). To put it mildly, most witnesses at the investigating committees were parsimonious with the truth, more interested in talking around the questions and spinning a narrative than giving forthright answers. Trudeau claimed, without a shred of support, that he “pushed back” against the CSSG proposal when it came to his attention “for the first time” on May 8. We now know that the PMO was aware of the program from its early stages and that nothing was done to address the conflicts of interest in the subsequent two weeks before it was approved by Cabinet.
Trudeau’s concern, as so often, was with Quebec: WE has no presence in French-speaking Canada, so a patch-around had to be found to service that part of the country before WE could be approved. This also gives the lie to Trudeau’s claim that the public service presented Cabinet with an all-or-nothing proposition, because WE was the only organization in Canada capable of operating this program, so it was WE or nothing.
In fact, WE could not run the program nationally; it had to sub-contract a Quebec PR firm for the program’s French-speaking component. As a recent Postmedia editorial noted, “A May 4 memo stated the Treasury Board Secretariat was concerned the Ministry of Employment and Social Development ‘has not provided evidence to suggest that WE Charities possesses the capacity to undertake the work, especially under accelerated time lines.’” And WE was not the only available candidate, because the public service itself could have delivered the program bilingually, in-house. That is, after all, what Canada’s vast and amply compensated bureaucracy is paid to do: administer programs.
More recently, we learned that the federal Procurement Ombudsman has opened investigations into six other sole-sourced contracts given by the Trudeau government to the WE conglomerate.
It is nearly impossible to track down every thread of the quickly metastasizing WE scandal, as fascinating as this might be for students of mismanagement and corruption in government. No, it is not a trivial affair. The reason I still say the WE scandal is being blown out of proportion is that it is no bigger, and no worse, than several other Liberal scandals that are receiving much less attention. Following are several examples. They are largely bare-bones outlines, for each of them deserves thorough investigation of its own. Liberal malfeasance is, sadly, a target-rich environment and this is not an exclusive list.
AMD Medicom is a Quebec firm that, as the name implies, supplies medical equipment. Amidst the pandemic in April it was handed a 10-year, sole-sourced contract worth $382 million to deliver “made-in-Canada” N-95 masks for health-care providers. This is the only 10-year contract of its kind ever awarded by the government. As luck would have it, AMD Medicom closed its last Canadian factory in 2019, and would have to manufacture the masks at its plants in China, Taiwan, France, or the United States. Not only does this seem like a poor choice in an era when countries worldwide are attempting to repatriate critical supply chains, but some of these very countries have banned exports of personal protective equipment such as masks.
Not to worry, though: AMD Medicom quickly secured a $4 million loan from the Quebec government to build a new PPE factory in Montreal. To add insult to injury, the company hired SNC-Lavalin to undertake this construction project. That would be the same SNC-Lavalin we were assured would die a painful death if it was not granted a remediation agreement for the bribery and corruption charges it was facing. It transpires that, despite pleading guilty to these criminal charges early last year, SNC-Lavalin has received no fewer than 142 government contracts since January 2019. Trudeau knew all along that SNC-Lavalin’s 9,000 jobs in Quebec were never in jeopardy due to a criminal conviction; he was personally making sure of that. Yet he kept insisting to Canadians that this was his motivation for pressuring the Attorney-General on the remediation agreement.
Oh, and by the way, don’t worry about the welfare of Gerald Butts, Trudeau’s former Principal Secretary. Since resigning over his role in the SNC-Lavalin scandal, he’s been well looked-after, with his new employer receiving $200,000 in sole-sourced government contracts to bad-mouth Canadian oil.
Meanwhile, in an unrelated bonus scandal, the Liberals paid $237 million for 10,000 pandemic ventilators from another Quebec company, this one owned by former Liberal MP Frank Baylis. The contract was signed on June 15, a day before these particular ventilators were approved by Health Canada. The equipment is supposed to be delivered by October 21, nearly half-a-year after a huge new supply of ventilators was thought to be needed. In any event, Canada never came close to running short of ventilators; today, the purported “need” is laughable.
MCAP is a mortgage finance firm in a limited liability partnership with the beloved Caisse de dépôt et placements du Québéc. In January, the company hired Rob Silver as a vice-president. Silver is the husband of Katie Telford, Chief of Staff of the PMO. In April, Silver conducted a campaign of unregistered lobbying with his Liberal friends to change the rules of the Canada Emergency Wage Subsidy program to include MCAP. It did not qualify because it is majority-owned by a public pension fund and the program is aimed at saving private-sector jobs. It has been reported that Silver went so far as to suggest specific legislative language.
While Silver failed in this effort, MCAP was nevertheless rewarded with a contract to administer the Canada Emergency Commercial Rent Assistance (CECRA) program for small businesses. The arrangement was whitewashed through another zany Liberal patch-around. The government handed the CECRA to the Canada Mortgage and Housing Corporation (CMHC) to administer, but since CMHC had no experience with running programs for commercial or rental properties, it in turn subcontracted the job to another company with no experience with commercial or rental properties – MCAP, after meeting with Silver.
Out-of-Control Infrastructure Contracts
You might be sensing a pattern. But I haven’t even gotten to the mother of all Liberal boondoggles, the $187 billion spent by Infrastructure Minister Catherine McKenna. She has apparently pushed funding for 55,000 “projects” out the door since being sworn in last November, albeit can only document about 33,000 of them. The Parliamentary Budget Officer, Yves Giroux, says he cannot find any records of around 20,000 projects purportedly begun under McKenna’s tenure. Can one doubt that, hidden among these 55,000 infrastructure projects, and especially among the 20,000 undocumented projects, there are hundreds if not thousands more clones of WE, Medicom or MCAP?
The Liberal Party of Canada’s motto should be: “Helping the Laurentian elites, and those lobbying hard to join them!” Even if there is no actual criminality in the awarding of these wasteful government contracts to friends of the Liberal Party – and make no mistake, politicians of all stripes shave a vested interest in keeping the criminal law out of political decision-making – it is still a grotesque banquet of Liberals feathering their own nest by feathering the nests of supporters. It is Liberals buying support and votes by playing favourites with taxpayers’ money. McKenna’s irregular infrastructure spending has perhaps led to a closer look being taken at the contracts she authorized while Minister of the Environment.
If McKenna’s empire is as well-run and ethical as the rest of the Liberal government, it could make the Sponsorship Scandal (aka Adscam or Sponsorgate) of the early 2000s look like child’s play. Conservative leader Erin O’Toole should promise to pull Justice John Gomery out of retirement to conduct another public inquiry into Liberal self-dealing.
A quick reminder of Sponsorgate, from Wikipedia: “Illicit and even illegal activities within the administration of the program were revealed, involving misuse and misdirection of public funds intended for government advertising in Quebec. Such misdirections included sponsorship money awarded to Liberal Party-linked ad firms in return for little or no work, in which firms maintained Liberal organizers or fundraisers on their payrolls or donated back part of the money to the Liberal Party.” Let’s also remind ourselves that “the money” refers to taxpayers’ dollars being funnelled from the federal Treasury to unworthy firms and, from there, to Liberal operators to help elect or re-elect Liberal politicians. All on a vast scale. And, as hard as it is to prove criminal corruption, it was so bad that criminal charges were laid and a few people actually went to prison.
As an aside, let’s also not overlook Trudeau’s ongoing venal if not plain goofy decisions with respect to China. In March, he rushed to sign an agreement with CanSino Biologics, a company with ties to the Chinese military, and handed over a pile of cash to develop a vaccine against the Wuhan flu. Now, even as shipments to Russia proceed, China’s Communist dictatorship is holding up shipments of the trial vaccines to Canada for “customs” reasons (perhaps as part of its power play to secure the release of Huawei executive Meng Wanzhou, currently under luxury house arrest in Vancouver, or perhaps because the vaccine is useless).
A Self-Serving Distraction
The danger for concerned Canadian voters and taxpayers is that the WE Charity issue is sucking all of the oxygen out of the room, diverting attention from the numerous other instances of Liberal misrule. By getting wrapped up in the details of this one, we may also be distracted from learning some broader lessons in public administration. One is that Canada has its own “Deep State” – a partisan permanent bureaucracy that obediently carries out the Liberal agenda, whether or not the party is actually in power, while opposing Conservative and conservative initiatives and ideas.
When, during his time as Prime Minister, Stephen Harper told government scientists they would need approval for any planned public statements, there was an uproar over freedom of speech and the independence of the federal agencies they worked for. (The clumsy move was taken out of concern that some of these “scientists” were political hacks out to sabotage the government’s agenda regardless of actual scientific findings.) When Harper cancelled the mandatory long-form census because so many ordinary citizens considered the questions immoral, agenda-driven or invasive of their privacy, the head of Statistics Canada resigned in a snit and made highly critical, public statements in response.
Yet when Liberals ask the permanent bureaucracy to participate in obviously improper behaviour, they leap to the challenge with gusto – and then help to cover it up. The Wernick siblings can be taken as exemplars of this problem. Michael misrepresented what was going on behind the scenes to get the Attorney-General to interfere with the work of the independent public prosecutor’s service, then fell on his sword when his narrative proved false. Rachel is now doing her best not to contradict the Trudeau narrative that the CSSG really was developed by the public service and presented to Cabinet with minimal direction from her political masters.
Understandably suspicious Opposition MPs accordingly demanded the production of documents outlining the steps taken in the creation of the CSSG program, and WE’s involvement. Any redactions were to be made by the Office of the Law Clerk exclusively on the basis of protecting national security and Cabinet confidences. They set a deadline of August 8. Government departments waited until August 18, the day Trudeau prorogued Parliament – shutting down the Parliamentary committees investigating the scandal. The 5,000 pages were heavily pre-redacted, prompting the Parliamentary law clerk, Philippe Dufresne, to write a letter of protest to the relevant department heads. Canada’s public service apparently thinks it is their right to override the directions of Parliament to assist a Liberal government.
If a Conservative government ever tried to pull off even a tiny fraction of what the Liberals have been involved in over the past year or two, there would be endless leaks of damaging information coming from “deep state” bureaucrats. They would not have their Conservative political masters’ backs (as a disinterested civil service should not – but for any party in power). And that is to say nothing of the chronic, deep-seated bias in the mainstream news media.
Let us also keep in mind the difference in sheer scale. Harper’s government was almost undone by, and might well have largely lost the 2015 election over, the media-sustained scandal over the misspending of Senator Mike Duffy. The malfeasance involved a few hundred thousand dollars – i.e., one-one-thousandth that of the larger Liberal scandals – and the greatest wrongdoing uncovered was of a PMO official who tried to help pay the money back. Yet no effort is spared to present Conservative “corruption” as morally equivalent to the Liberal variety.
The Conservative Party has to wake up to who their enemies are, and figure out how they are going to defeat or rein them in. Passing conflict-of-interest legislation with maximum $500 fines isn’t going to deter anyone with a Liberal bent for “doing well by doing good.” It is insulting to Canadians who know what the consequences would be if they conducted themselves half as badly in the private sector.
Canada needs a comprehensive ethics-in-government overhaul with teeth and real consequences for misbehaviour. The public service needs to be reminded that its job is to administer the agenda of the democratically elected government, in a professional and non-partisan way, regardless of who is in power, and to refuse to collude in illegal or unethical behaviour. The permanent bureaucracy should not have its own political agenda. The message must be: if you cannot be scrupulously non-partisan, then public employment is not for you.
Five years ago I didn’t think it would be possible, but the Liberals under Trudeau have turned out to be worse than the Liberals under Jean Chrétien. The shameless corruption and contempt involved in the Covid-spending scandals are more numerous, larger and worse than the Sponsorship Scandal. Much worse. This is why the Liberals are happy that the media’s attention is so focused on the WE scandal. We (but certainly not the ethically challenged WE) must use this opportunity to make permanent changes to the rules of government so that these recurring nightmares cease.
Grant A. Brown has a DPhil from Oxford University and an LL.B. from the University of Alberta, taught applied ethics and political philosophy at the University of Lethbridge, practised family law, and currently runs a B&B in Stratford, Ontario.