A former member of Sustainable Development Technology Canada’s board of directors was found to have violated the Conflict of Interest Act twice, while another just barely avoided violating the act on a technicality.
Following an inquiry requested by Conservative MP Michael Barrett, Canada’s ethics commissioner investigated former SDTC board chair Annette Verschuren and board member Guy Ouimet to determine whether or not they had violated the Conflict of Interest Act by using their position to benefit their private interests.
The ethics commissioner found that Verschuren had violated the conflict of interest act on two occasions in her role as an SDTC board member and chair of the board.
SDTC is an arms-length crown corporation, managed by Innovation, Science, and Economic Development Canada, responsible for funding clean technology projects and companies, distributing hundreds of millions of dollars annually.
Verschuren was found to have benefitted companies she is associated with, including the Verschuren Centre, a clean technology accelerator that she founded; NRStor, an energy storage company that she founded and remains as its majority shareholder; and MaRS, an innovation hub whose board of directors she chairs.
As chair of SDTC’s board, Verschuren played a critical role in helping to approve or reject applications for funding.
Both MaRS and the Verschuren Centre nominated 21 clean tech projects for SDTC seed funding between May 2020 and June 2023.
While Verschuren is required to recuse herself from any meetings or decisions regarding all projects in which she has a conflict of interest, Verschuren only abstained from votes on 10 of these projects – voting on 11 of the projects nominated by MaRS and the Verschuren Centre.
For her lack of recusals from board votes on these matters, the ethics commissioner found that Verschuren had violated sections 6(1) and 21 of the Conflict of Interest Act.
Verschuren also failed to recuse herself from votes to distribute COVID-19 emergency relief payments to SDTC-funded companies, which helped to benefit NRStor, a company she founded and of which she holds a majority of shares.
While NRStor had originally been granted funding from SDTC before Verschuren was appointed to SDTC’s board, Verschuren’s proposal to distribute COVID-19 relief payments equivalent to a 5% increase in funding benefitted NRStor with a payment of $106,176 in 2020.
The next year, SDTC granted similar COVID-19 relief payments to its portfolio companies, resulting in NRStor being granted a further $111,485, totalling $217,661.
“Ms. Verschuren participated in the decisions knowing that NRStor, the company she founded, leads, and owns as a majority shareholder, was one of the beneficiaries of that supplementary funding. She was required to recuse herself from those matters and failed to do so,” reads the report.
In a statement to True North, Verschuren said that she did her best to follow the rules, but blamed SDTC’s business practices and the legal advice she received.
“In keeping with my career-long commitment to complying with the highest standards of governance and ethical conduct, I followed legal guidance to ensure compliance with all established guidelines during my time as Chair of SDTC,” said Verschuren.
“I also followed established board practices that pre-dated my tenure. However, the commissioner concluded that ‘a lack of consistency in the decision-making process at SDTC, coupled with incorrect legal advice,’ resulted in a potential perception of conflict. I accept his decision – just as he accepts that I took what I believed to be the right steps to manage any conflicts of interest.”
Barrett, the Conservative MP, made a video celebrating the ethics commissioner’s findings, while denigrating SDTC as Justin Trudeau’s “billion-dollar green slush fund.”
“This is of course unacceptable but not surprising after nine years of Justin Trudeau and his NDP-Liberal government.” said Barrett.
The ethics commissioner found that Guy Ouimet was in a conflict of interest with his role as an SDTC board member and his role in the battery recycling company Lithion, but excused his transgression due to a technicality.
Ouimet helped Lithion Technologies in the development of its business and financial plans in 2017 and 2018, helping to get the company incorporated in July 2018.
As reported by True North, Lition was approved for $3,842,000 in funding from SDTC on Aug. 29, 2018, just one and a half months after Lithion was incorporated. While Ouimet was offered a position on Lithion’s board and a 1% stake in the company after its incorporation, he didn’t exercise this option until November 2020.
Ouimet was informed of his appointment to SDTC’s board in October 2018 and formally appointed in November of the same year.
When SDTC’s board was considering sending out COVID-19 relief payments in 2020 and 2021 to its portfolio companies, which included Lithion, Ouimet did not recuse himself from these discussions and participated in the board votes.
In 2020, Lithion received $192,100 and $201,705 in 2021 from SDTC’s COVID-19 relief payments.
While the ethics commissioner found that Ouimet had a private interest in Lithion putting him in a conflict of interest, the watchdog applied that principle of de minimis non curat praetor, meaning that the decision-makers are not concerned with trifling matters or small things.
Since Ouimet only holds a 1% stake in Lithion, the ethics commissioner determined that Ouimet’s interest in Lithion is only of a trivial nature, so the allegation was dismissed.
True North reached out to Ouimet for comment, though no response was received.