Opposition calls for overhaul of green tech fund following critical report

Opposition parties are calling on Ottawa to overhaul management of a federal green fund that has come in for some pointed criticism over its use of public funds.

According to a third-party report commissioned by the federal government and made public on Tuesday, Sustainable Development Technology Canada (SDTC) did not follow its internal rules on conflict of interest and financial management in its grant agreements with various companies.

"It's an irresponsible way to spend public funds. And we're talking about tens of millions of dollars, which is unacceptable," says Conservative MP Gérard Deltell. "It certainly raises very serious questions about the organization's management team."

Under a five-year, billion-dollar agreement with the federal government, SDTC provides grants to small and medium-sized enterprises in the field of environmental technologies. The amount to be spent by the foundation increases each year and is set to reach $320 million by 2025-2026.

NDP Leader Jagmeet Singh said a new approach is needed to manage the foundation, which was launched by the federal government in 2001.

"What has happened clearly demonstrates that we need to re-evaluate the approach," he said. "If there are problems ... we need to fix them before we go any further."

Champagne says he's 'weighing options'

A group of whistleblowers brought a complaint against SDTC to the federal government earlier this year, citing concerns about the foundation's management of its federal funding and human resources.

Innovation Minister François-Philippe Champagne suspended the foundation's ability to provide further funding this week.

He called on SDTC to implement a "management response and action plan" designed by his department by the end of 2023, adding he is "exploring further options to strengthen the governance oversight of SDTC."

The government hired an external firm, Raymond Chabot Grant Thornton, to conduct an investigation of the allegations.

In their report, investigators raised questions about SDTC's decision to distribute $38 million in emergency "relief payments" in 2020 and 2021 to companies with which it had previous funding agreements.

Raymond Chabot Grant Thornton's report said these contributions "did not appear to be consistent with the requirements" of SDTC's contribution agreement with the government and "the payments do not require project cost eligibility or monitoring and reporting."

One of the funding recipients also "appeared to be ineligible" to receive an amount of $280,000, said the report.

The report also said SDTC's conflict of interest policy was being "inconsistently applied."

The report cited a declaration of a conflict of interest between SDTC's chief executive officer and an external reviewer that was "backdated ... under the direction of the corporation's external legal counsel."

In another portion of the report, investigators found that two streams of funding created by SDTC, worth over $20 million, appeared to "contravene" or "not meet the main goal" of its agreement with the government.

In a statement, SDTC said that "the report found no clear evidence of wrongdoing or misconduct at SDTC and indicated that no further investigation is merited."

SDTC spokesperson Janemary Banigan said that SDTC's board and management team "are taking action to implement the recommendations as quickly as possible to minimize disruption to Canada's sustainable innovation ecosystem."